2021 ANNUAL REPORT
Dear Quanterix Shareholder,
Much as the microscope and other fundamental advances have fundamentally transformed our ability to see the
world, Quanterix’ Simoa® technology allows researchers to measure proteins at previously undetectable levels.
Researchers are translating those insights into innovative new approaches for diagnosing and treating many of the
world’s most pressing healthcare needs. Indeed, we are living and working in an incredible time in human history
when new breakthroughs in healthcare technology and advances in personalized medicine are happening at an
incredible pace. However, it is not just the technology that is advancing rapidly; it is also our understanding of
disease detection and prevention, and our Simoa technology is playing a pivotal role in these advances.
Having joined Quanterix in June 2021 and assumed the role of CEO in April of this year, I have had the opportunity
to meet with many of our customers and industry leaders, dedicated employees, and committed shareholders.
Through these interactions, I have been continually impressed and strengthened in my belief that together we can
help unlock the promise of earlier disease detection, better treatments, and improved patient outcomes.
The past year has been a pivotal one for our company. We have seen our technology progress, giving researchers the
ability to closely examine critical biomarkers across key therapeutic areas. Simoa technology has been referenced in
numerous peer-reviewed studies ranging from Alzheimer’s disease to multiple sclerosis. Our work in the upcoming
year will be focused on consolidating these gains and continuing to push the boundaries of what is possible with our
ultra-sensitive technology.
Our goal moving into 2022 is to continue to transform healthcare by enabling the translation of biomarker research
into clinical testing. We will do this by 1) strengthening our foundation and scaling with quality, 2) continuing our
innovation history by developing and commercializing new technology that expands the impact and relevance of our
neurology portfolio, and 3) beginning to translate biomarker detection into clinical testing services in our Accelerator
services laboratory and with partners globally.
Our Commitment to Innovation is Driving Fundamental Advances in Neurology
In 2021, neurology was a central focus area as our company and our customers continued to advance game-changing
technology that has the potential to deliver better prognoses and enhanced treatment methods to improve the quality
and longevity of life.
Eli Lilly and Company presented data from its Phase 2 TRAILBLAZER ALZ study, which employed Quanterix’
HD-X technology and assays to measure plasma pTau-217, using antibodies developed by Lilly. These assays
represent a new frontier in Alzheimer’s disease clinical research that can enable new trial designs focused on
patients at earlier stages of disease, facilitating accelerated and more efficient trial enrollment.
Following the FDA approval of ADUHELM™, Biogen conducted biomarker studies on Phase 3 EMERGE and
ENGAGE trial samples, utilizing Quanterix’ Simoa HD-X to measure plasma pTau-181. Dr. Oskar Hansson from
University of Lund reported preliminary data showing a dose-dependent reduction in plasma pTau-181 levels
following treatment with ADUHELM, which correlated with decreases in brain amyloid as measured by PET scan
and a slowing of cognitive decline across four independent assessment tools.
Quanterix’ instruments and assays also powered the largest and most diverse global investigation in the role of
plasma neurofilament light (NfL) for dementia diagnosis, published in Nature Communications. This research
marked one of the most robust studies to date to assess the use of NfL in blood to screen for neurodegeneration as a
cause of cognitive symptoms, to differentiate among neurodegenerative disorders and distinguish psychiatric
disorders, and to derive age-related concentration cutoffs that may help to maximize plasma NfL’s usefulness in a
clinical setting.
Data presented at the 2021 Clinical Trials on Alzheimer’s Disease (CTAD) conference described a prototype Simoa
plasma pTau-231 assay and its potential role in detecting Alzheimer’s disease pathology. This emerging biomarker
has the potential to allow for detection even earlier in the disease continuum, when patients are asymptomatic and
not yet exhibiting brain pathology in PET imaging studies.
In addition, in 2021 our Simoa pTau-181 blood test was granted Breakthrough Device designation by the U.S. FDA
as an aid in diagnostic evaluation of Alzheimer’s disease, an important step in our long-term strategy to develop
ultra-sensitive in vitro diagnostics.
Other Advances
For the first time, our full-year revenues passed the $100 million threshold, led by strong performance in
neuro-related studies and applications.
The Company strengthened its balance sheet by successfully raising $287.5 million in gross proceeds
through a follow-on offering completed in Q1. Quanterix had $399.0 million in cash, cash equivalents and
restricted cash on the balance sheet as of December 31, 2021.
Highlighting the reach of our products and services, our Simoa technology was highlighted in a record-
breaking 465 third-party publications, bringing total Simoa-specific inclusions to nearly 1,600.
Instrument installations increased by 32% in 2021 to 708 at year-end, with many HD-X instruments being
used for neuro-related applications.
The FDA expanded the Emergency Use Authorization (EUA) label for Quanterix’ Simoa SARS-CoV-2 N
Protein Antigen Test to include testing with nasal swab and saliva samples, and for asymptomatic serial
testing with nasal swab samples. The expanded label established this test as the first antigen test authorized
for use with saliva samples.
Looking Ahead
Looking forward, 2022 is already off to a strong start. We have entered into exciting new relationships with Eli Lilly
and the Alzheimer’s Drug Discovery Foundation (ADDF), both of which have the potential to power fundamental
advances in the diagnosis and treatment of Alzheimer’s disease. Just last week, we announced that our Simoa
neurofilament light (NfL) plasma test has been granted breakthrough device designation by the US FDA as a
prognostic aid in assessing the risk of disease activity in patients diagnosed with relapsing-remitting multiple
sclerosis (MS).
Yet this is just the beginning. We will continue to strengthen the foundation of our people, technology and processes
to set the stage for continued growth. We have a tremendous opportunity to expand the reach and relevance of our
product portfolio through new innovation and biomarker translation.
Finally, I would like to thank Kevin Hrusovsky for all that he has accomplished on behalf of Quanterix and our
shareholders since he first joined Quanterix in 2014. I look forward to working closely with Kevin in his new role
as our Company’s Executive Chair.
Through our efforts, we are poised to disrupt healthcare and unlock shareholder value creation through the power
of earlier and less invasive disease detection. Thank you for your continued support.
Sincerely,
Masoud Toloue
President and Chief Executive Officer
FORWARD-LOOKING STATEMENTS
Any statements in this annual report, including the letter to shareholders, about our future expectations, plans and
prospects, including statements about the implementation of our business model and strategic plans for our business,
research and development activities, and expectations regarding our financial condition, constitute forward-looking
statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ
materially from those indicated by such forward-looking statements as a result of various important factors including
the factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K included in this annual
report. In addition, forward-looking statements included in this annual report represent our views only as of the date
of this annual report and should not be relied upon as representing our views as of any subsequent date. We
specifically disclaim any obligation to update any forward-looking statements included in this annual report.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
OR
☒
☐
For the transition period from to
Commission file number: 001-38319
QUANTERIX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
900 Middlesex Turnpike, Billerica, MA
(Address of principal executive offices)
20-8957988
(I.R.S. Employer Identification No.)
01821
(Zip Code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Registrant’s telephone number, including area code: (617) 301-9400
Title of each class
Common Stock, $0.001 par value per share
Trading Symbol(s)
QTRX
Name of each exchange on which registered
The Nasdaq Global Market
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.
Large accelerated filer
Non-accelerated filer
Accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2021), the aggregate market value of the voting and non-voting
common equity held by non-affiliates of the registrant, based on the last reported sales price for the registrant’s common stock, par value $0.001 per share, on The Nasdaq
Global Market on such date, was approximately $2.1 billion.
As of February 23, 2022, the registrant had 36,847,340 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement for its 2022 Annual Meeting of Stockholders, which the registrant intends to file with the Securities and Exchange
Commission pursuant to Regulation 14A within 120 days after the end of the registrant’s fiscal year ended December 31, 2021, are incorporated by reference into Part III of
this Annual Report on Form 10-K.
TABLE OF CONTENTS
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6. Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . .
Item 13. Certain Relationships and Related Transactions, and Director Independence. . . . . . . . . . . . . . . . . . . . . . . .
Item 14. Principal Accountant Fees and Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III
PART IV
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Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Special Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. All
statements other than statements of historical facts contained in this Annual Report on Form 10-K are forward-looking
statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,”
“contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,”
“seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These
forward-looking statements include, but are not limited to, statements about:
•
•
•
•
•
•
•
•
•
the implementation of our business model and strategic plans for our business, products and services;
the potential size of the markets and fields addressable by our Simoa technology platforms;
the commercialization and adoption of our existing products and services and the success of our new
product and service offerings;
our ability to develop additional assays, including multiplexed assays;
the accuracy of our estimates regarding expenses, future revenues, capital requirements and our needs for
additional financing;
the ability of our Simoa technology’s sensitivity to improve existing diagnostics and to enable the
development of new diagnostic tests and tools;
the potential of our Simoa technology in the field of companion diagnostics and its adoption by healthcare
professionals;
the impact of our Simoa technology on proteomic research;
the usefulness of the data generated by our Simoa technology in the life science research, diagnostic and
precision health screening fields; and
•
our financial performance.
These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including
those further described in “Part I, Item 1A, Risk Factors” and elsewhere in this Annual Report on Form 10-K. Moreover,
we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not
possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent
to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any
forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking
events and circumstances discussed in this Annual Report on Form 10-K may not occur and actual results could differ
materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that
the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results,
levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved
or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of
this Annual Report on Form 10-K to conform these statements to new information, actual results or to changes in our
expectations, except as required by law.
You should read this Annual Report on Form 10-K and the documents that we reference herein and have filed
with the Securities and Exchange Commission (SEC) as exhibits to this Annual Report on Form 10-K with the
ii
understanding that our actual future results, levels of activity, performance, and events and circumstances may be
materially different from what we expect.
This Annual Report on Form 10-K includes statistical and other industry and market data that we obtained from
industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party
research, surveys and studies generally indicate that their information has been obtained from sources believed to be
reliable, although they do not guarantee the accuracy or completeness of such information. This Annual Report on
Form 10-K also contains estimates and other statistical data from a custom market research report by an independent
third-party research firm, which was commissioned by us and was issued in January 2021, referred to herein as the
Third-Party Research Report. Such data involves a number of assumptions and limitations and contains projections and
estimates of the future performance of the markets in which we operate and intend to operate that are subject to a high
degree of uncertainty. We caution you not to give undue weight to such projections, assumptions and estimates.
Service Marks, Trademarks and Trade Names
Unless the context otherwise requires, the terms “Quanterix,” the “Company,” “we,” “us” and “our” in this
Annual Report on Form 10-K refer to Quanterix Corporation and its subsidiaries. “Quanterix,” “Simoa,” “Simoa HD-X,”
“Simoa HD-1,” “SR-X,” “SP-X”, “HD-X Analyzer”, “HD-1 Analyzer” and our logo are our trademarks. All other
service marks, trademarks and trade names appearing in this Annual Report on Form 10-K are the property of their
respective owners. We do not intend our use or display of other companies’ trade names, trademarks or service marks to
imply a relationship with, or endorsement or sponsorship of us by, these other companies.
iii
Item 1. BUSINESS
Overview
PART I
We are a life sciences company that has developed next-generation, ultra-sensitive digital immunoassay
platforms that advance precision health for life sciences research and diagnostics. Our platforms are based on our
proprietary digital “Simoa” detection technology. Our Simoa bead-based and planar array platforms enable customers to
reliably detect protein biomarkers in extremely low concentrations in blood, serum and other fluids that, in many cases,
are undetectable using conventional, analog immunoassay technologies, and also allow researchers to define and validate
the function of novel protein biomarkers that are only present in very low concentrations. These capabilities provide our
customers with insight into the role of protein biomarkers in human health that has not been possible with other existing
technologies and enable researchers to unlock unique insights into the continuum between health and disease. We
believe this greater insight will enable the development of novel therapies and diagnostics and facilitate a paradigm shift
in healthcare from an emphasis on treatment to a focus on earlier detection, monitoring, prognosis and, ultimately,
prevention.
We believe that our Simoa platforms are among the most sensitive commercially available multiplex protein
detection platforms and significantly advance ELISA technology, which has been the industry standard for protein
detection for over 40 years. Furthermore, we believe the HD-X is the most sensitive commercially available automated
multiplex protein detection platform. Proteins are complex molecules that are required for the structure, function and
regulation of the body’s tissues and organs, and are the functional units that carry out specific tasks in every cell. The
human body contains approximately 20,000 genes, each of which can produce multiple proteins. It is estimated that
these 20,000 genes can produce over 100,000 different proteins, of which at least 10,000 are known to be secreted in
blood. Researchers and clinicians rely extensively on protein biomarkers for use as research and clinical tools. However,
normal physiological levels of many proteins are not detectable in easily accessible blood samples using conventional,
analog immunoassay technologies, and many of these technologies can only detect proteins once they have reached
levels that reflect more advanced disease or injury. For many other low abundance proteins, these technologies cannot
detect proteins even at disease- or injury-elevated levels. We believe that Simoa’s sensitivity offers a new way to
monitor healthy individuals and detect proteins associated with nascent disease or injury early in the disease cascade,
which holds the key to intervention before disease or injury has advanced to the point where more significant clinical
signs and symptoms have appeared.
Our Simoa platforms have achieved significant scientific validation and commercial adoption. Simoa
technology has been cited in approximately 1,600 scientific publications in areas of high unmet medical need and
research interest such as neurology, oncology, cardiology, infectious disease and inflammation. Our growing customer
base is comprised of over 1,120 customers across our end markets and includes 22 of the 25 largest biopharmaceutical
companies.
Our Products and Services
Our proprietary Simoa technology is based on traditional enzyme-linked immunosorbent assay (ELISA)
technology, which has been the most widely used method of detection of proteins for over 40 years. Given our target
customers’ familiarity with the core ELISA technology, we believe this offers us a significant competitive advantage.
Our Simoa bead-based platform differs, however, from conventional ELISA in its ability to trap single molecules in tiny
microwells, 40 trillionths of a milliliter, that are 2.5 billion times smaller than traditional ELISA wells, allowing for an
analysis and digital readout of each individual molecule, which is not possible with conventional ELISA technology.
This ability is the key to our bead-based technology’s unprecedented sensitivity. In addition, in January 2018, we
acquired Aushon BioSystems, Inc. (Aushon) and its proprietary sensitive planar array detection technology. Leveraging
our proprietary sophisticated Simoa image analysis and data analysis algorithms, we further refined this planar array
technology to provide the same Simoa sensitivity found in our Simoa bead-based platform. We currently offer the
1
following three Simoa instruments, which we believe are among the most sensitive multiplex protein detection platforms
commercially available today:
• HD-X: We commercially launched our HD-X instrument in the second half of 2019. The HD-X is an
upgraded version of the Simoa HD-1 (our first Simoa instrument which was launched in January 2014) that
was designed to deliver significant productivity and operational efficiency improvements, as well as greater
user flexibility. The HD-X is based on our bead-based technology, and assays run on the HD-X are fully
automated.
• SR-X: We commercially launched our SR-X instrument in December 2017. The SR-X utilizes the same
Simoa bead-based technology and assay kits as the HD-X in a compact benchtop form with a lower price
point, more flexible assay preparation, and a wider range of potential applications.
• SP-X: We commercially launched our SP-X instrument in April 2019. The SP-X is based on our Simoa
planar array technology, which allows for significantly greater multiplexing capabilities, and is, we believe,
ideal for oncology and immunology applications.
The current menu of approximately 80 analyte-specific single-plex and multi-plex bead-based assay kits
includes assays for biomarkers in the areas of neurology, infectious disease, immunology, oncology and cardiology for
both human and mouse samples. The current menu of Simoa planar array reagent kits includes approximately
120 biomarkers ranging from 1-10 analytes per assay in the areas of immunology and oncology research. We intend to
continue to increase the number of Simoa biomarker assays across our platforms. In addition, both the bead-based
platform and the planar array platform allow ease and flexibility in assay design, enabling our customers to develop their
own in-house assays, called “homebrew” assays.
We also provide contract research services for customers through our CLIA-certified Accelerator Laboratory.
The Accelerator Laboratory provides customers with access to Simoa technology, and supports multiple projects and
services, including sample testing, homebrew assay development and custom assay development. To date, we have
completed over 1,700 projects for approximately 400 customers from all over the world using our Simoa platforms. In
addition to being an important source of revenue, we have also found the Accelerator Laboratory to be a significant
catalyst for placing additional instruments, as a number of customers for whom we have provided contract research
services have subsequently purchased an instrument from us.
In view of the COVID-19 pandemic, in 2020 we adjusted our operations to expand capacity in our Accelerator
Laboratory to support customers whose operations have been disrupted and to sustain clinical trials. We also determined
that our cytokine assay technology could provide researchers with important and differentiated tools to study disease
progression, cytokine release syndrome, and patient-treatment response in the fight against COVID-19, and began
developing a SARS- CoV-2 semi-quantitative IgG assay and a SARS-CoV-2 antigen detection assay and prototyping a
high-definition multiplex SARS-CoV-2 serology assay. In December 2020, the United States Food and Drug
Administration (FDA) issued an Emergency Use Authorization (EUA) for our Simoa Semi-Quantitative
SARS-CoV-2 IgG Antibody Test, and in January 2021, the FDA issued an EUA for our Simoa SARS-CoV-2 N Protein
Antigen Test, each of which is run on our HD-X instrument. In September 2021, the FDA expanded the EUA for our
Simoa SARS-CoV-2 N Protein Antigen Test to include testing with nasal swabs and saliva and for asymptomatic serial
testing with nasal swab samples. We are exploring extending the test to home-based sample collection and pooling to
enable larger scale testing.
In August 2019, we completed the acquisition of UmanDiagnostics AB (Uman), a company located in Umeå,
Sweden, that supplies neurofilament light (Nf-L) antibodies and Nf-L ELISA kits. Uman’s Nf-L antibodies are widely
recognized by researchers and biopharmaceutical and diagnostics companies world-wide as the premier solution for the
detection of Nf-L to advance the development of therapeutics and diagnostics for neurodegenerative conditions. Since
we commercially launched the first assay that could reliably measure Nf-L in blood using Uman’s antibodies and our
Simoa technology in 2017, Nf-L has seen dramatic growth as a neurological biomarker. This innovation allowed
research, previously limited primarily to cerebrospinal fluid (CSF), to expand significantly and has led many of the
world’s foremost neurology researchers and clinicians to conclude that Nf-L may be one of the most clinically relevant
2
brain biomarkers available today. Despite significant efforts by us and others to identify or develop an alternative source
of antibodies, we believe the Uman Nf-L antibodies remain the best-in-class for highly sensitive and specific Nf-L
detection in serum or plasma. The superiority of the Uman antibodies is evidenced by the fact that, to date over
600 publications relating to the detection of Nf-L in serum or plasma have used the Uman antibodies. The Uman
acquisition secured the Nf-L antibody supply critical to our industry-leading ultrasensitive Simoa Nf-L assays and
services, provided us with additional revenue opportunities via the sale of the Nf-L antibodies and Nf-L ELISA kits, and
positioned us to capitalize on significant growth opportunities with Nf-L applications in Alzheimer’s disease, multiple
sclerosis, and other neurodegenerative conditions.
We sell our instruments, consumables and services to the life science, pharmaceutical and diagnostics industries
through a direct sales force and support organizations in North America and Europe, and through distributors or sales
agents in other select markets. In addition, we sell Uman’s Nf-L antibodies and Nf-L ELISA kits directly, and in
conjunction with a distributor worldwide. We have an extensive base of customers in world class academic and
governmental research institutions, as well as pharmaceutical, biotechnology and contract research companies, using our
technology to gather information to better understand human health.
Our Market Opportunities
Our commercial strategy is to pursue the application of our Simoa technology to the life science research/drug
trial, diagnostics and precision health screening markets.
Life Science Research/Drug Trial Markets
Our initial target market is the large and growing life science research and drug trial markets, which we
sometimes refer to collectively as the translational market. We have chosen these markets to target initially because we
believe there is reduced regulatory and reimbursement risk. We believe our Simoa platforms are well-positioned to
capture a significant share of these markets because of superior sensitivity, automated workflow capabilities,
multiplexing and the ability to work with a broader range of sample types. By substantially lowering the limit of
detection of protein biomarkers, our Simoa platforms hold significant potential to expand research into the diseases
associated with the thousands of proteins that were previously undetectable, as well as into earlier detection of the
proteins currently detectable by other technologies only after they have reached levels that reflect more advanced disease
or injury.
In addition, as pharmaceutical companies look for ways to more efficiently and effectively develop and obtain
regulatory approval for drugs, use of biomarkers in clinical drug trials is becoming more prevalent. With Simoa’s
sensitivity and its ability to detect many biomarkers in blood, plasma and other non-invasive samples that cannot be
detected by many other technologies, we believe that we are uniquely positioned to take advantage of this opportunity.
Using Simoa’s unprecedented sensitivity to measure previously undetectable levels of target biomarkers prior to and
following administration of a drug, drug developers can non-invasively and objectively determine whether a drug
candidate is having a desired impact on the target biomarker.
According to estimates in the Third-Party Research Report, as we further expand our focus in these markets on
other areas, such as immunology, oncology and other therapeutic areas, coupled with the growing adoption of
decentralized clinical trials, the life science research/drug trial addressable market is expected to expand to as much as
$12 billion.
Diagnostics
The diagnostic market represents a significant future commercial opportunity for our Simoa technology as well.
We believe existing biomarker diagnostics, as well as invasive, expensive and inconvenient diagnostic methods,
including spinal tap, diagnostic imaging and biopsy, can be improved by Simoa’s sensitivity to enable earlier detection
of diseases and injuries. Simoa technology also has significant potential in the emerging field of companion diagnostics.
Drug developers can use companion diagnostics to stratify patients and select only those patients for whom a drug is
expected to be most effective and safe.
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In view of the COVID-19 pandemic, as an initial foray into the diagnostics market, in 2020 we began
developing a SARS- CoV-2 semi-quantitative IgG assay and a SARS-CoV-2 antigen detection assay and prototyping a
high-definition multiplex SARS-CoV-2 serology assay. We currently have EUAs for our Simoa Semi-Quantitative
SARS-CoV-2 IgG Antibody Test and our Simoa SARS-CoV-2 N Protein Antigen Test, each of which is run on our
HD-X instrument. In addition, in 2021, our pTau-181 assay was granted Breakthrough Device Designation from the
U.S. FDA as an aid in the diagnosis of Alzheimer’s disease. We believe this gives us an opportunity to further advance a
potential Alzheimer’s disease diagnostic test either alone or with a partner.
There has also been significant interest from third parties to use our technology to develop applications for the
diagnostic market, such as our licensing and supply arrangement with Siemens Healthineers (Siemens) for access to our
Nf-L antibodies, which will allow Siemens to begin developing blood-based Nf-L clinical tests for future
commercialization, as well as our non-exclusive License Agreement with Abbott Laboratories, pursuant to which we
granted Abbott a non-exclusive, worldwide, royalty-bearing license under our bead-based single molecule detection
patents for IVD use.
Precision Health Screening
The ability of our Simoa platforms to detect and quantify normal physiological levels of low abundance
proteins that are undetectable using conventional, analog immunoassay technologies could enable our technology to be
used to monitor protein biomarker levels of seemingly healthy, asymptomatic people, and potentially to signal and
provide earlier detection of the onset of disease. This has the potential to facilitate a paradigm shift in healthcare, from
an emphasis on treatment to a focus on earlier detection, monitoring, prognosis and, ultimately, prevention, enabling a
“precision health” revolution.
Simoa products sold or used in the diagnostics and precision health screening markets will be subject to
regulation by the FDA or comparable international agencies, including requirements for regulatory clearance or approval
of such products before they can be marketed. To date, other than our EUAs for our COVID assays, we have not
received or applied for regulatory approvals for Simoa products. See “Risk Factors—Risks Related to Governmental
Regulation and Diagnostic Product Reimbursement” and “—Government Regulation” for a more detailed discussion
regarding the regulatory approvals that may be required.
Our Competitive Strengths
We believe that our competitive strengths include the following:
• Proprietary ultra-sensitive Simoa digital immunoassay technology platforms. We believe our Simoa
platforms are among the most sensitive, commercially available protein detection platforms, and can detect
and quantify proteins of clinical interest that are undetectable using conventional, analog immunoassay
technologies. This sensitivity allows researchers to measure critical protein biomarkers at earlier stages in
the progression of a disease or injury, which we believe will enable the development of novel therapies and
diagnostics and facilitate a paradigm shift in healthcare from an emphasis on treatment to a focus on earlier
detection, monitoring, prognosis and, ultimately, prevention. The sensitivity of our Simoa technology also
allows researchers to gather biomarker information from smaller samples that can be collected less
invasively than samples required by other assay technologies. We believe that sensitivity is so important
that we have published an approach to increase the sensitivity of our Simoa technology – in some cases as
much as 100-fold - and we intend to launch a beta program using this more sensitive technology in our
Accelerator Laboratory by the end of 2022.
• Technology platforms that leverage and improve upon industry standard ELISA technology. Simoa uses
the basic principles of conventional bead-based ELISA immunoassay technology, which has been the most
widely used method of detection of proteins for over 40 years. Adding digital capability to this industry
standard platform has resulted in expanded capabilities and improved performance. Given our target
customers’ familiarity with the core ELISA technology, our Simoa platforms are easily integrated with
existing customer workflows including data analysis.
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• Deep and expanding scientific validation and customer base. Our Simoa technology has been cited in
approximately 1,600 publications to date, including JAMA Neurology and Nature, and is becoming a vital
tool in cutting edge life sciences research. We have established relationships with key opinion leaders, and
our growing base of over 1,120 customers includes some of the world’s leading academic and government
research institutions as well as 22 of the 25 largest biopharmaceutical companies.
• Leading position in market solidified by robust customization capabilities, assay design flexibility and
automation of our HD-X instrument. Our technical capabilities and expertise allow our customers to
design high-quality, customized assays utilizing our Simoa platforms. The needs of our customers vary
widely, and the flexibility of the Simoa detection technology utilized across both our bead-based and planar
array platforms allows us to provide innovative, low cost solutions for customers in multiple markets
across various applications. In addition, the HD-X instrument provides fully automated analysis from
sample introduction to analytical results, and our proprietary approach to ELISA digitization enables rapid
digital data acquisition and assay results. This automation and speed provides customers high research and
development productivity through greater throughput and lab efficiency.
• Highly attractive business model that leverages growing installed base of instruments. Our installed
instrument base increased by 32% in 2021 to 708 instruments as of December 31, 2021. The integration of
our technology into our customers’ projects provides ongoing sales of assays and consumables, and as we
continue to grow our installed instrument base, optimize workflows and expand our assay menu, we expect
to increase our revenues derived from consumables. Our consumables and other product revenue increased
by $27.7 million to $55.1 million in 2021 from $27.4 million in 2020 and $25.6 million in 2019.
Consumables and other product revenue represented approximately 50% of our total revenue in 2021.
• Our highly experienced senior management team. We are led by a dedicated and highly experienced
senior management team with significant industry experience and proven ability to develop novel
solutions. Each of the members of our senior management has more than 20 years of relevant experience.
Our Strategy
Our goal is to enable new research into biomarkers to allow greater insight into their role in human health in
ways that have not been possible with any other current research and diagnostic technology. We believe this greater
insight will facilitate a paradigm shift in healthcare from an emphasis on treatment to a focus on earlier detection,
monitoring, prognosis and, ultimately, prevention.
Our strategy to achieve this includes:
• Focus on the highly attractive, expanding market for protein detection and analysis. Our focus on the
detection of protein biomarkers is driven by a growing understanding of the essential role and impact of
proteins on human health. While genomic research provides valuable information about the role of genes in
health and disease, proteins are both more prevalent than nucleic acids and, we believe, more relevant to a
precise understanding of the nuanced continuum between health and disease. Protein measurement goes
beyond genetic predisposition, indicating the impact of a range of influences on health, including
environmental factors and lifestyle, providing deeper and more relevant insight into what is happening in a
person’s body in real time. Our technology provides a unique bridge between understanding the human
genotype and phenotype, which we believe addresses a large unmet need in life science research,
translational medicine and diagnostic and drug development.
• Continue to drive adoption of our Simoa technology in the life science research/drug trial markets in the
near-term, and the diagnostics and precision health screening markets in the long-term. We believe our
Simoa technology has the potential to significantly expand the life science research market because of its
unrivaled sensitivity, in particular by enabling researchers to perform studies on protein biomarkers that
they were previously unable to perform. We also believe that our Simoa technology is uniquely positioned
for use by pharmaceutical companies in drug trials as biomarkers are being increasingly used as an adjunct
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to help increase the potential of regulatory approval. We have focused on these markets because we
believe there is reduced regulatory and reimbursement risk for us in these markets. However, we also
believe Simoa technology has the capability to enable the development of a new category of less-invasive
diagnostic tests and tools based on blood, serum, saliva and other fluids that could replace current invasive,
expensive and inconvenient diagnostic methods, including spinal tap, diagnostic imaging and biopsy. We
have had two EUAs approved for our COVID assays. In addition, in 2021 our pTau-181 assay was granted
Breakthrough Device designation from the FDA as an aid in diagnostic evaluation of Alzheimer’s disease,
and we are currently aiming to launch our first laboratory developed test in 2023. In the precision health
screening market, we believe that Simoa technology has the potential to someday be used to monitor
biomarker levels of seemingly healthy, asymptomatic people, and potentially to signal and provide earlier
detection and monitoring of the onset of disease.
• Leverage the growing importance of Nf-L and other neurological biomarkers to advance the
development of therapeutics and diagnostics for neurodegenerative conditions. The importance of Nf-L
and other neurological biomarkers, such as pTau-181 and pTau-217, has increased significantly in recent
years, and our ultra-sensitive Simoa platforms have allowed research of neurological disorders, previously
limited primarily to CSF, to expand significantly. To capitalize on the growing importance of Nf-L, in
mid-2019, we acquired Uman and its proprietary Nf-L antibodies, which we believe are the best-in-class
for highly sensitive and specific Nf-L detection in serum or plasma. In addition, other neuro biomarkers,
such as pTau-217 and pTau-181, have shown increasing relevance in neurological research and drug
development. In 2021, Lilly presented new data from its Phase 2 TRAILBLAZER-ALZ study of its
Alzheimer’s disease drug candidate donanemab, which employed our ultra-sensitive Simoa technology to
measure plasma pTau-217, using antibodies developed by Lilly. Lilly reported a significant reduction in
blood levels of phosphorylated Tau protein after treatment with donanemab, and that a reduction in plasma
pTau-217 levels correlated with the slowing of cognitive decline. In addition, following the FDA approval
of its Alzheimer’s disease drug ADUHELM™, Biogen conducted Simoa biomarker studies on Phase 3
EMERGE and ENGAGE trial samples, utilizing Simoa technology to measure plasma pTau-181.
Preliminary data was reported that showed a dose-dependent reduction in plasma pTau-181 levels
following treatment with ADUHELM, which correlated with decreases in amyloid PET and a slowing of
cognitive decline across four independent assessment tools. We believe that the use of biomarkers in
clinical trials for neurological conditions is becoming increasingly important. With Simoa’s sensitivity and
its ability to detect many neurological biomarkers in blood and plasma that cannot be detected by many
other technologies, we believe that we are uniquely positioned to take advantage of this opportunity.
• Grow into new markets organically with our customers and through strategic collaborations. Our
customers have access to a large breadth of diverse markets, spanning research and clinical settings. As
these customers continue to gain experience with our proprietary Simoa technology and further appreciate
its potential, we believe moving into diagnostics and ultimately precision health is a natural extension of
some of the work that our customers are doing today in the research market. For example, use of Simoa
technology by pharmaceutical companies to measure biomarkers in clinical trials potentially could lead to a
companion diagnostic, and ultimately a precision health test that could monitor and identify early disease.
We believe this progression with our customers will help us move into new markets organically in a cost-
effective manner, while also retaining significant upside. In addition, we have entered into, and will
continue to explore, partnerships that will help us access these markets. For example, following our
acquisition of Uman, we entered into a licensing and supply arrangement with Siemens Healthineers for
access to Uman’s proprietary Nf-L antibodies, which will allow Siemens to begin developing blood-based
Nf-L clinical tests for future commercialization. Additionally, in September 2020, we granted Abbott
Laboratories a non-exclusive license under our bead-based single molecule detection patents for IVD use.
• Grow through strategic acquisitions. We intend to strategically acquire businesses and technologies to
expand our operations and strengthen our market position. For example, in January 2018, we acquired
Aushon and its proprietary sensitive planar array detection technology, which led to the development of our
SP-X instrument. In mid-2019, we also acquired Uman, securing the Nf-L antibody supply critical to our
industry leading ultrasensitive Simoa Nf-L assays and services and positioning us to capitalize on the
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growing significance of Nf-L as a neurological biomarker. We expect that acquisitions will continue to be
an important part of our strategy to increase scale, and we intend to pursue acquisitions to expand product
offerings, strengthen domestic or international distribution, add technologies, and/or provide access to
complementary or strategic growth areas.
• Leverage the PPH ecosystem. Powering Precision Health (PPH) is a non-profit organization founded in
2016 by our Chief Executive Officer, Kevin Hrusovsky. PPH aims to gather many of the world’s top
innovators, scientists, physicians, medical professionals, patient advocates, government officials, regulators
and investors to discuss the critical issues and opportunities related to advancing precision medicine in key
disease areas including neurology, oncology, cardiology, inflammation and infectious disease. Quanterix is
uniquely positioned to leverage this PPH ecosystem to gather and synthesize key insights and information,
to collaborate on important research, to deepen our credibility and expand our business opportunities in the
proteomics space, and to raise awareness of the technological innovations, such as Simoa, that are
powering the latest breakthroughs in medical research and precision health.
Industry Background
We intend to pursue the application of our Simoa technology to the life science research/drug trial, diagnostics
and precision health screening markets. Our initial commercial strategy targets the large and growing life science
research/drug trial markets, and we believe that the diagnostic market and the precision health screening market
represent significant future commercial opportunities for Simoa. According to estimates in the Third-Party Research
Report, we believe the aggregate commercial opportunity across these markets has the potential to expand to over
$100 billion.
Proteins are versatile macromolecules and serve critical functions in nearly all biological processes. They are
complex molecules that organisms require for the structure, function and regulation of the body’s tissues and organs. For
example, proteins provide immune protection, generate movement, transmit nerve impulses and control cell growth and
differentiation. Understanding an organism’s proteome, the complete set of proteins and their expression levels, can
provide a powerful and unique window into its health, a window that other types of research, such as genomics, cannot
provide.
The human body contains approximately 20,000 genes. One of the core functions of genes, which are
comprised of DNA, is to regulate protein production—which ones are produced, the volume of each, and for how long—
influenced by both biological and environmental factors. These 20,000 genes help govern the expression of over
100,000 proteins, of which at least 10,000 are known to be secreted in blood, and fewer than 1,300 of which can be
consistently detected in healthy individuals using conventional immunoassay technologies. Accordingly, the study of
much of the proteome has not been practical given the limited level of sensitivity of existing technologies. Currently,
across our platforms, we commercialize assays that address approximately 154 protein biomarkers secreted or released
in blood and CSF.
While genomic research provides valuable information about the role of genes in health and disease, proteins
are both more prevalent than nucleic acids and, we believe, more relevant to understand precisely the nuanced
continuum between health and disease. Genes may indicate the risk of developing a certain disease later in life, but they
are not able to account for the impact of environmental factors and lifestyle, such as diet and exercise, or provide insight
into what is happening in a patient’s body in real time. For example, identical twins have the same genotype, but may
develop different diseases over the course of their lifetime, largely due to environmental factors.
Much like the sequencing of the human genome with the Human Genome Project and the development of both
PCR and next generation sequencing technologies to detect nucleic acids, both of which accelerated biomedical genomic
research, we believe the ability to study more of the proteome enabled by our more sensitive protein detection
technology will have a profound impact on proteomic research. With our ultra-sensitive Simoa detection technology,
researchers can assess the symptoms of disease or injury and compare them to the presence and levels of relevant
proteins that are not detectable using conventional technologies, leading to a better understanding of how proteins
individually and/or collectively impact and influence important biological processes and the health and well-being of
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individuals. We believe this research into understanding the individual characteristics and functioning of proteins will be
central to earlier detection, monitoring, prognosis and, ultimately, prevention, by providing researchers with the ability
to assess the impact of particular proteins on the progress of disease and injury from the time of early onset of
symptoms.
Existing Technologies and Their Limitations
Protein Analysis
ELISA has been the most widely used method of sensitive detection of proteins for over 40 years. In simple
terms, in ELISA, an unknown amount of antigen (e.g., protein, peptide, antibody, hormone) is affixed to a solid surface,
usually a polystyrene multiwell plate, either directly, or indirectly through use of a conjugated secondary or “capture”
antibody (sandwich ELISA). A specific “detection” antibody is applied over the surface to bind to the antigen. This
detection antibody is linked to an enzyme, and in the final step, a substance called an enzyme substrate is added, and the
enzyme converts to colored or fluorescent product molecules, which are detected by a plate reader. Sandwich ELISA is
depicted in the graphic below:
Aside from ELISA, there are other technologies available for protein analysis today, such as Western blotting,
mass spectrometry, chromatography, surface plasmon resonance, Raman-enhanced signal detection, immuno-PCR, and
biobarcode assay. However, the proteins detectable by these conventional, analog immunoassay technologies represent a
mere fraction of the at least 10,000 secreted proteins in circulation in human blood. While a number of techniques have
been used to attempt to increase sensitivity of detection, we believe all of these approaches have limitations, including:
•
•
•
•
dilution of colored or fluorescent product molecules due to large volume of liquid in traditional-sized wells,
limiting sensitivity;
narrow dynamic range (i.e., the range of concentration of proteins being detected), that may require sample
dilution, diluting molecules and increasing sample volume requiring additional enzymes to reach detection
limit;
low detection limit of readers restrict sensitivity and ability to detect low abundance proteins, particularly
when proteins are at normal physiological levels; and
limited success in increasing sensitivity of detection due to procedural complexity and length.
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Genomic Analysis
Over the past few decades, scientists have developed a variety of genomic analysis methods to measure an
increasing number of genomic biomarkers aimed at detecting diseases. The most widely used method for genetic testing
is PCR, which involves amplifying, or generating billions of copies of, the DNA sequence in question and then detecting
the DNA with the use of fluorescent dyes. PCR is used to amplify the nucleic acid through the use of enzymes and
repeated heating and cooling cycles, with fluorescent dyes incorporated during each amplification cycle. The expression
of the nucleic acid is then inferred based on the number of amplification cycles required for the target to become
detectable. PCR is sometimes referred to as an analog technology because the number of cycles of amplification, rather
than a direct measure, is used to infer the level of gene expression. The wide availability of PCR chemistry makes it a
popular approach for measuring the expression of nucleic acids, but the use of enzymes in numerous cycles of
amplification can introduce distortion and bias into the data, potentially compromising the reliability of results,
particularly at low concentrations.
Our Simoa Technology
Our Simoa technology significantly advances conventional sandwich ELISA technology and is capable of
unprecedented protein detection sensitivity.
Simoa Bead-Based Technology
Simoa bead-based digital immunoassays utilize the basic principles of conventional bead-based sandwich
ELISA and require two antibodies: one for capture, which is applied to the beads, and one for detection. Unlike ELISA,
which runs the enzyme-substrate reaction on all molecules in one well, Simoa bead-based reactions are run on individual
molecules in tiny microwells, 40 trillionths of a milliliter that are 2.5 billion times smaller than traditional ELISA wells.
Traditional ELISA analog measurements increase in intensity only as the concentration of a sample increases. Simoa
bead-based digital technology measurements, however, are independent of sample concentration intensity and rely on a
binary signal/no signal readout, enabling detection sensitivity that was not previously possible.
Our Simoa bead-based platform is highly flexible, designed to enable practical high-sensitivity protein analysis
for academic researchers looking at novel proteins all the way through to high throughput analysis performed by large
biopharmaceutical organizations. The following chart describes the steps through which our Simoa bead-based
technology detects proteins:
Simoa Bead-Based Analytic Process
Sample Preparation of ELISA Sandwich
Simoa bead-based technology uses beads coated with
capture antibodies that bind specifically to the protein being
measured. After an enzyme-linked detection antibody binds
to the protein, the enzyme substrate is added (as depicted by
the white star in the graphic on the left). The enzyme
associated with the enzyme-linked detection antibody then
reacts with the enzyme substrate causing the enzyme
substrate to become fluorescent (as depicted by the change
in color of the star in the graphic).
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Injection of Bead/Substrate Solution into Simoa Disk
This mixture of beads and enzyme substrate is then injected
into our proprietary Simoa disk, which contains 24 arrays of
microwells arranged radially. Each 3 × 4 millimeter array
contains approximately 239,000 microwells, each of which
is large enough to accommodate only a single bead.
Bead/Substrate Solution Settles and Wells are Sealed
The bead/substrate solution is drawn across the array and
the beads settle by gravity onto the surface of the array, and
a fraction of them fall into the microwells. The remainder
lie on the surface, and oil is introduced into the channel to
displace the substrate solution and excess beads, and to seal
the wells.
Simoa Readout
The entire array is then imaged using ultrasensitive digital
imaging, and the sealed wells that contain beads associated
with captured and enzyme labeled protein molecules are
identified.
Our Simoa bead-based technology offers unprecedented protein detection sensitivity and enables detection of
low abundance and previously undetectable biomarkers. This sensitivity allows researchers to measure critical protein
biomarkers at earlier stages in the progression of a disease or injury, which we believe will enable the development of
novel therapies and diagnostics and facilitate a paradigm shift in healthcare from an emphasis on treatment to a focus on
earlier detection, monitoring, prognosis and, ultimately, prevention.
The ability to multiplex, or simultaneously measure multiple proteins (or other biomarkers) in a single assay,
can be important to researchers to maximize the biological information from a sample, and to develop more specific
diagnostic tests. However, one of the main issues with multiplexing can be the loss of sensitivity. Our Simoa platforms
maintain single plex precision, while competitive platforms lose sensitivity when multiplexing is used. Multiplexing is
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achieved with our Simoa bead-based technology by using beads labeled with different fluorescent dyes specific to the
biomarker being analyzed. After the assay is run, the array of microwells is imaged across the wavelengths of the
different labeled beads. The results are measured for each protein captured by each of the different beads. In 2017, we
commercially launched a Simoa neurology 4-plex assay (Nf-L, tau, GFAP and UCH-L1) for the study of
neurodegenerative conditions and traumatic brain injury. In 2020, we introduced a Simoa 4-plex assay (Aβ40, Aβ42,
GFAP, Nf-L) designed to measure key biomarkers of Alzheimer’s disease and related disorders. Whereas other assay
technologies require CSF to detect all four of these markers, or are limited to only single-plex measurement in serum and
plasma, due to Simoa’s sensitivity, this is the only assay that can detect all of these biomarkers directly from serum and
plasma samples in a multiplex assay format. This is a significant advantage in terms of ease of use, patient comfort,
speed and cost-effectiveness. While we have demonstrated the ability to identify and differentiate up to 35 different bead
subpopulations on the HD-X, which is a prerequisite to our ability to develop assays with the capacity to detect an
equivalent number of proteins in a single sample, we believe that the ability to multiplex above a 6-plex and maintain
single-plex sensitivity and precision is currently limited using bead-based technology due to constraints in the number of
bead-containing wells for each plex that are imaged on the Simoa disk. However, our bead-based assay technology was
used by researchers to demonstrate a novel workflow to expand multiplexing through a process of sequential incubation
steps. We plan to explore this and other methods to potentially expand the multiplexing capabilities of our Simoa assay
technology to enable plexing of 10-20 plex over the next two years.
Simoa Planar Array Technology
Simoa planar array immunoassays utilize the basic principles of conventional microplate-based sandwich
ELISA and require two antibodies: one for capture, which is applied to the beads, and one for detection. Unlike ELISA,
which runs the enzyme-substrate reaction on all molecules coating the entire bottom surface in one well, Simoa planar
array reactions are run on spatially segregated micro-spots within the bottom of microtiter plate wells that concentrate
the signal to a surface area 1,000 times smaller than a traditional ELISA. The small spot size and spatial segregation of
each spot enables multiplexing up to 12 different assays within a single sample well.
Our Simoa planar array platform is highly flexible, designed to enable practical high-sensitivity multiplex
protein analysis for drug discovery and development applications as well as translational biomarker research. The
following chart describes the steps through which our Simoa planar array technology detects proteins:
Simoa Planar Array Analytic Process
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A)
B)
C)
D)
E)
F)
Analyte-specific capture antibodies are printed in microspots (100 microns) in a circular pattern in the bottom of a 96-well
microtiter plate. Each microspot contains capture antibodies that are specific for different analytes. Up to 12 spatially
resolved microspots can be printed in each well.
Samples are added to the plate and incubated with a benchtop plate shaker to bind the target analyte molecules to the
microspots. Unbound molecules are removed by washing the plate with a benchtop plate washer or manual wash manifold.
A mixture of biotinylated detection antibodies are added to the plate to form the antibody sandwich. Excess detection
antibodies are removed by washing.
Streptavidin-HRP (horseradish peroxidase enzyme) conjugated is added to the plate to bind to the biotin groups forming the
complete immunocomplex followed by a washing step.
A high-sensitivity chemiluminescent substate reagent is added to each well. The enzyme associated with the enzyme linked
detection antibody then reacts with the enzyme substrate causing the enzyme substrate to emit light.
The plate is placed into the Quanterix SP-X imaging system. A scientific-grade CCD camera images the entire plate and all
micro-spots simultaneously. The low background of the plate surface and the high-sensitivity of the camera enable detection
of very low levels of light with a high dynamic range. The SP-X imaging software utilizes algorithms to optimize exposure
time and combine multiple images in the image analysis. Protein concentrations are determined by comparing the intensity
of microspots to known analytical standards.
Below is an image of a 96-well Simoa planar array plate containing 12 microspots. Each microspot represents a
different analyte measured in each sample well.
We believe the Simoa planar array technology is well-suited for researchers who value the ability to measure
critical immunomodulatory biomarkers in patient serum and plasma with ultra-sensitive detection in a multiplex assay
format. The figure below demonstrates 10-plex detection of key cytokines in human serum from normal healthy donors
with corresponding assay Limit of Detection (LoD) listed in femtogram per ml.
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Nucleic Acid Testing
Our initial focus has been on the use of Simoa technology to detect protein biomarkers. However, our Simoa
bead-based technology has also been used to detect nucleic acids in biological samples. While methods for measuring
nucleic acid molecules have advanced substantially, currently available techniques still have drawbacks. For example,
PCR is a sensitive method that is widely used for measuring gene expression. However, PCR carries the potential for
data distortion and bias from the repeated addition of enzymes, and heating and cooling cycles needed to amplify a copy
of the nucleic acid being measured. In nucleic acid analysis, we believe that Simoa has the potential to provide the same
sensitivity as traditional PCR-based assays with the following benefits:
•
•
•
no need for amplification of the targeted nucleic acid, which can result in amplification distortion and bias;
reduced cross-contamination because of direct detection of single molecules vs. the detection of a large
number of copies of the nucleic acid; and
the ability to detect some samples without requiring purification of the nucleic acid, such as in
environmental water or serum samples.
For detection of nucleic acids with our Simoa bead-based technology, instead of coating the beads with capture
antibodies as is done for detecting proteins, the beads are coated with nucleic acid capture probes. Samples with the
target nucleic acid molecules are then added and are captured by the beads. Nucleic acid detection probes (instead of
detection antibodies) are then added and attach to the target nucleic acid molecules which are then labeled using an
enzyme substrate that is detected and counted using the Simoa disk and instrument.
Our Market Opportunities
Our commercial strategy is to pursue the application of our Simoa technology to the life science research/drug
trial, diagnostics and precision health screening markets.
Life Science Research/Drug Trial Markets
Our initial target market is the large and growing life science research and drug trial markets, which we
sometimes refer to collectively as the translational market. We have chosen these markets to target initially because of
the reduced regulatory and reimbursement risk. We believe our Simoa platforms are well-positioned to capture a
significant share of these markets because of superior sensitivity, automated workflow capabilities, multiplexing and the
ability to work with a broader range of sample types.
Proteomics, the study of the proteins produced by the body, is important to understanding disease, and
researchers study proteins to understand the biological basis for disease and how to improve diagnosis and treatment.
The proteins detectable by conventional, analog immunoassay technologies represent a mere fraction of the proteins that
can be detected by Simoa technology, and we believe that Simoa can inspire a new level of research into these
previously undetectable proteins and their role in disease. By substantially lowering the limit of detection of protein
biomarkers, our Simoa platforms hold significant potential to expand research into the diseases associated with the
thousands of proteins that were previously undetectable, as well as into earlier detection of the proteins currently
detectable by other technologies only after they have reached levels that reflect more advanced disease or injury. Simoa
technology provides researchers the ability to see the nuanced continuum of health to disease more efficiently and
effectively than any other technology commercially available today, offering the potential for the first time to better
understand the onset of disease cascades and catalyzing a new era of medical and life science research, drug discovery
and disease prevention.
In addition, as pharmaceutical companies look for ways to more efficiently and effectively develop and obtain
regulatory approval for drugs, use of biomarkers in clinical drug trials is becoming more prevalent. With Simoa’s
sensitivity and its ability to detect many biomarkers in blood, plasma and other non-invasive samples that cannot be
detected by many other technologies, we believe that we are uniquely positioned to take advantage of this opportunity.
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Using Simoa’s unprecedented sensitivity to measure previously undetectable levels of target biomarkers prior to and
following administration of a drug, drug developers can non-invasively and objectively determine whether a drug
candidate is having a desired impact on the target biomarker. In addition, researchers can also use Simoa to monitor a
drug candidate’s unwanted effect on “off-target” biomarkers and predict side effects, addressing the significant issue of
drug toxicity, which is a leading cause of death in the United States.
According to estimates in the Third-Party Research Report, as we further expand our life science research focus
in other areas of immunology, oncology and other therapeutic areas, coupled with growing adoption of decentralized
clinical trials, the life science research/drug trial addressable market is expected to expand to as much as $12 billion.
Diagnostics
The diagnostic market represents a significant future commercial opportunity for our Simoa technology as well.
We believe existing biomarker diagnostics can be improved by Simoa’s sensitivity to enable earlier detection of diseases
and injuries, and that new diagnostics may be developed using protein biomarkers that are not detectable using
conventional, analog immunoassay technologies but are detectable using Simoa technology. We also believe that the
ultra-sensitive protein detection provided by our Simoa platforms can enable the development of a new category of
non-invasive diagnostic tests and tools based on blood, serum and other fluids that have the potential to replace current
more invasive, expensive and inconvenient diagnostic methods, including spinal tap, diagnostic imaging and biopsy.
Simoa technology also has significant potential in the emerging field of companion diagnostics. A companion
diagnostic test is a biomarker test that is specifically linked to a therapeutic drug that can help predict how a patient will
respond to the drug. Drug developers can use companion diagnostics to stratify patients and select only those patients for
whom a drug is expected to be most effective and safe. Companion diagnostics have demonstrated the ability to both
improve the probability of approval and accelerate approval of new drugs. Not only could Simoa be used to develop
companion diagnostics to stratify patients in clinical trials and for treatment, but Simoa’s sensitivity can also enable the
development of companion diagnostics based on protein biomarkers that can actively and regularly monitor whether an
approved drug is having the desired biological effect. This would quickly and efficiently enable doctors to adjust the
course of treatment as appropriate by increasing or decreasing dosages or even switching therapies.
In view of the COVID-19 pandemic, as an initial foray into the diagnostics market, in 2020 we began
developing a SARS- CoV-2 semi-quantitative IgG assay and a SARS-CoV-2 antigen detection assay and prototyping a
high-definition multiplex SARS-CoV-2 serology assay. In December 2020, the FDA issued an EUA for our Simoa
Semi-Quantitative SARS-CoV-2 IgG Antibody Test, and in January 2021, the FDA issued an EUA for our Simoa
SARS-CoV-2 N Protein Antigen Test, each of which is run on our HD-X instrument. In September 2021, the FDA
expanded the EUA for our Simoa SARS-CoV-2 N Protein Antigen Test to include testing with nasal swabs and saliva
and for asymptomatic serial testing with nasal swab samples. We are exploring extending the test to home-based sample
collection and pooling to enable larger scale testing.
In 2021, our pTau-181 assay was granted Breakthrough Device designation from the FDA as an aid in the
diagnosis of Alzheimer’s disease. We believe this gives us an opportunity to further advance a potential Alzheimer’s
disease diagnostic test either alone or with a partner.
There has also been significant interest from third parties to use our technology to develop applications for the
diagnostic market. Following our acquisition of Uman, we entered into a licensing and supply arrangement with
Siemens Healthineers for access to Uman’s proprietary Nf-L antibodies, which will allow Siemens to begin developing
blood-based Nf-L clinical tests for future commercialization. Additionally, in September 2020, we entered into a non-
exclusive License Agreement with Abbott Laboratories, pursuant to which we granted Abbott a non-exclusive,
worldwide, royalty-bearing license under our bead-based single molecule detection patents for IVD use.
Precision Health Screening
The ability of our Simoa platforms to detect and quantify normal physiological levels of low abundance
proteins that are undetectable using conventional, analog immunoassay technologies could enable our technology to be
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used to monitor protein biomarker levels of seemingly healthy, asymptomatic people, and potentially to signal and
provide earlier detection of the onset of disease. This has the potential to facilitate a paradigm shift in healthcare, from
an emphasis on treatment to a focus on earlier detection, monitoring, prognosis and, ultimately, prevention, enabling a
“precision health” revolution.
We believe there is the potential for a number of neurological, cardiovascular, oncologic and other protein
biomarkers associated with disease to be measured with a simple blood draw on a regular, ongoing basis as part of a
patient’s routine health screening, and for those results to be compared periodically with baseline measurements to
predict or detect the early onset of disease, prior to the appearance of symptoms.
Our Key Focus Areas
We have focused the application of our Simoa technology on areas of high growth and high unmet need and
where existing platforms have significant shortcomings that our technology addresses. In particular, we have focused on
neurology and oncology, as well as COVID, cardiology, infectious disease and inflammation.
Neurology
We believe that the ability of our Simoa technology to detect neurological biomarkers in blood at ultra-low
levels, which have traditionally only been detectable in cerebrospinal fluid (CSF), has the potential to rapidly advance
neurology research and drug development, and transform the way brain diseases and injuries are diagnosed and treated.
To our knowledge, the brain is the only organ in the body for which there is not currently a blood-based diagnostic test.
The challenge with developing blood-based tests for the brain is that the blood-brain barrier, which is formed by
endothelial cells lining the cerebral microvasculature, is very tight and severely restricts the movement of proteins and
other substances between these endothelial cells and into blood circulation. Accordingly, diagnosis of brain disease and
injury has traditionally required either an MRI scan of the brain or a spinal tap to collect CSF, both of which are costly
and highly invasive for the patient. The sensitivity of the Simoa technology has enabled researchers to discover that
extremely small amounts of critical neural biomarkers diffuse through the blood-brain barrier, and are released into the
blood during injury and in connection with many neurodegenerative brain diseases. However, the concentrations of
many these neural biomarkers in the blood are so low that they are undetectable by conventional, analog immunoassay
technologies.
To date, there have been over 1,000 neurology-related scientific publications using our Simoa technologies, and
we believe that ultra-sensitive digital detection of neural related biomarkers in the blood is becoming an essential
research and development tool for an increasing range of neurological disorders, including Alzheimer’s disease, multiple
sclerosis, dementia, Parkinson’s disease, and traumatic brain injury, or TBI. The goal of this research is to eventually
develop accurate diagnostic tools, predictive health screens and, ultimately, more effective treatments. The importance
of Nf-L and other neurological biomarkers, such as pTau-181 and pTau-217, has increased significantly in recent years.
In addition, biomarkers are being increasingly used as an adjunct by pharmaceutical companies in clinical trials to help
increase the potential for regulatory approval, particularly in neurological indications. With Simoa’s sensitivity and its
ability to detect many neurological biomarkers in blood and plasma that cannot be detected by many other technologies,
we believe that we are uniquely positioned to take advantage of this opportunity, in particular with respect to
Alzheimer’s disease and multiple sclerosis.
Dementia is a collective name for brain syndromes that affect memory, thinking, behavior and emotion.
According to Alzheimer’s Disease International, as of 2021, there were more than 55 million people worldwide living
with dementia, a figure expected to increase to over 139 million by 2050, and the annual global cost of dementia is now
above $1.3 trillion. Alzheimer’s disease is a progressive neurodegenerative disorder that affects cognition, function and
behavior and is the most common cause of dementia.
In 2021, Lilly presented new data from its Phase 2 TRAILBLAZER-ALZ study of its Alzheimer’s disease drug
candidate donanemab, which employed our ultra-sensitive Simoa technology to measure plasma pTau-217, using
antibodies developed by Lilly. Lilly reported a significant reduction in blood levels of phosphorylated Tau protein after
treatment with donanemab, and that a reduction in plasma pTau-217 levels correlated with the slowing of cognitive
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decline. In addition, following the FDA approval of its Alzheimer’s disease drug ADUHELM™, Biogen conducted
Simoa biomarker studies on Phase 3 EMERGE and ENGAGE trial samples, utilizing Simoa technology to measure
plasma pTau-181. Preliminary data was reported that showed a dose-dependent reduction in plasma pTau-181 levels
following treatment with ADUHELM which correlated with decreases in amyloid PET and a slowing of cognitive
decline across four independent assessment tools. These results highlight the potential role for emerging biomarker
measurements in the detection of Alzheimer’s disease pathology even earlier in the disease continuum, when patients are
asymptomatic and not yet exhibiting brain pathology in PET imaging studies.
In 2017, researchers using Simoa technology published a paper in JAMA Neurology demonstrating that a simple
blood test for Nf-L exhibited the same level of diagnostic accuracy for diagnosing Alzheimer’s disease as currently
established CSF biomarkers. The study was a major study of almost 600 patients from the Alzheimer’s Disease
Neuroimaging Initiative. The graph below depicts the diagnostic accuracy of plasma Simoa Nf-L measurements
compared with traditional CSF biomarkers. The diagnostic accuracy of the plasma Simoa Nf-L results approached 90%,
in line with the CSF biomarkers on the same patients.
Diagnostic Accuracy
In addition, Simoa plasma Nf-L values were associated with cognitive deficits and neuroimaging hallmarks of
Alzheimer’s disease at baseline and during follow-up. High plasma Nf-L correlated with poor cognition and Alzheimer’s
disease-related brain atrophy and with brain hypometabolism (lower neural energy). These data suggest a simple Simoa
blood test for Nf-L may have clinical utility as a noninvasive biomarker in Alzheimer’s disease.
In October 2021, the FDA granted our Simoa pTau-181 blood test Breakthrough Device designation as an aid
in diagnostic evaluation of Alzheimer’s disease. We believe this gives us an opportunity to further advance a potential
Alzheimer’s disease diagnostic test either alone or with a partner. The FDA’s Breakthrough Device designation is
granted to products that have the potential to offer more effective diagnosis of life-threatening diseases with an unmet
medical need. The program is designed to enable accelerated development, assessment and review processes, with the
intention to provide patients with more timely access to breakthrough technologies or devices. Proposed indications
under the Breakthrough Device designation include use of the test results in adult patients, aged 50 years and over,
presenting with cognitive impairment who are being evaluated for Alzheimer’s disease and other causes of cognitive
decline as an aid in diagnostic evaluation for Alzheimer’s disease.
Multiple sclerosis is a chronic disease affecting the central nervous system (the brain and spinal cord). Multiple
sclerosis occurs when the immune system attacks nerve fibers and myelin sheathing (a fatty substance which
surrounds/insulates healthy nerve fibers) in the brain and spinal cord. This attack causes inflammation, which destroys
nerve cell processes and myelin, altering electrical messages in the brain. Multiple sclerosis is unpredictable and affects
each patient differently – some individuals may be mildly affected, while others may lose their ability to write, speak or
walk. According to the National MS Society, more than 2.3 million people have a diagnosis of multiple sclerosis
globally. In the U.S. alone, the National MS Society recently completed a prevalence study estimating nearly 1 million
people over the age of 18 live with a diagnosis of MS.
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Evidence of the potential clinical utility of Nf-L as a biomarker in multiple sclerosis is progressing rapidly, and
Simoa’s role in that progression has been significant. In 2021, Simoa technology supported 31 scientific presentations at
the 37th Congress of the European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS), the world’s
largest meeting dedicated to advancing research for multiple sclerosis. In 2020, Simoa supported 42 presentations at
ECTRIMS, and at ECTRIMS in 2019, there were nearly 50 presentations in which our Simoa Nf-L assay was used.
As an example, in one 2019 presentation, Novartis presented positive data from its Phase III ASCLEPIOS I and
II studies of its multiple sclerosis drug candidate, ofatumumab. One of the secondary endpoints included serum levels of
Nf-L as measured using our Simoa Nf-L assay. Novartis presented data that showed that, starting at three months after
initiation of ofatumumab treatment, and then at 12 and 24 months timepoints, patients given ofatumumab had
significantly lower blood levels of Nf-L, compared to those in the comparator arm of teriflunomide treated patients.
In another ECTRIMS presentation in 2019, Roche presented retrospective data from its Phase III OPERA I,
OPERA, II AND ORATORIO trials of its approved multiple sclerosis drug OCREVUS (ocrelizumab). In the data
presented at ECTRIMS, it was shown that treatment with OCREVUS lowered blood Nf-L levels and increased
proportion of patients reaching healthy donor range for Nf-L in both relapsing multiple sclerosis and primary progressive
multiple sclerosis. Roche believes that this data helps advance the understanding of Nf-L as a potential biomarker of
disease activity and for treatment monitoring, and may provide insight into the neuroprotective effects of the drug.
In an article published by Bjornevik, et al. in JAMA Neurology in September 2019, researchers presented data
that showed that levels of serum Nf-L, as measured by the Simoa Nf-L assay, were increased six years before the clinical
onset of multiple sclerosis. The researchers concluded that these data indicate that multiple sclerosis may have a
prodromal phase lasting several years and that neuroaxonal damage occurs during this phase, emphasizing the
importance of early diagnosis and treatment.
In a study published in Science in January 2022, researchers leveraged Simoa’s ability to detect the Nf-L at
ultra-low levels to show that Epstein-Barr virus (EBV) increases susceptibility toward developing multiple sclerosis.
Researchers of the study tested the hypothesis that multiple sclerosis is caused by EBV in a cohort comprising more than
10 million young adults on active duty in the U.S. military, 955 of whom were diagnosed with multiple sclerosis during
their period of service. Risk of multiple sclerosis increased 32-fold after infection with EBV, but was not increased after
infection with other viruses, including the similarly transmitted cytomegalovirus. Serum levels of Nf-L, a biomarker of
neuroaxonal degeneration, increased only after EBV seroconversion, suggesting that EBV played a role in nerve cell
damage.
TBIs lead to approximately five million individuals visiting emergency rooms per year in the United States
alone, often with broad and inconclusive diagnosis. Current methods of TBI diagnosis involve CT scans that fail to
diagnose approximately 90% of mild TBI. Simoa technology has demonstrated the sensitivity to identify relevant
neurological biomarkers, such as Nf-L, tau, GFAP and UCH-L1, to more adequately address diagnosis of TBIs and
overall brain health.
Leading researchers in neurology have used Simoa technology to study biomarkers in the blood of athletes after
concussion in many high-impact sports. Simoa can measure critical neural biomarkers in blood that correlate repeated
head trauma from both concussions and subconcussive events with poor patient outcomes, including the potential
development of Chronic Traumatic Encephalopathy (CTE), which currently can only be diagnosed after death via a brain
autopsy. A recent publication by a National Institute of Health researcher indicates that measuring tau in the blood with
Simoa may help identify concussed individuals requiring additional rest before they can safely return to play.
Eventually, we believe it may be possible to develop a mobile screen enabling clinicians to quickly and accurately
determine whether it is safe for concussed athletes to return to play.
In 2016, Fast Company named Quanterix one of the “World’s Most Innovative Companies” for our work in
concussion detection. We also were awarded two competitive grants from the NFL-GE Head Health Challenge to
advance this work in the detection and quantification of mild TBI.
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Oncology
Our ultra-sensitive Simoa technology has the potential to detect increased levels of oncology biomarkers during
the very early stages in disease development. Biomarkers can be useful tools for diagnostics, prognostics and predictive
cancer detection. However, many traditional assay technologies can only detect these biomarkers after the disease has
progressed and the patient has become symptomatic. Simoa’s highly sensitive detection capability may result in earlier
detection, better monitoring and treatment and improved prognoses for patients. Additionally, Simoa technology has
shown early promise as a liquid biopsy alternative to more invasive diagnostic procedures.
Simoa technology was used in an unpublished scientific study that indicates it may be possible to eventually
replace routine mammograms with a very sensitive, more accurate, low cost, non-invasive blood test. In this
retrospective study, researchers found that Simoa assays resulted in significantly fewer false positives and false
negatives than mammography. Inaccurate mammography can result in unnecessary stress, additional health care costs
from follow up diagnostic mammograms, unnecessary biopsies and increased lifetime exposure to radiation. Researchers
are also developing ultrasensitive assays for lung and pancreatic cancer biomarkers using Simoa technology, potentially
replacing the need for imaging and biopsy. We believe our Simoa technology has the potential to lead to rapid, cost
effective, accurate blood-based health screens, further enabling the liquid biopsy market.
Cancer immunotherapy is a promising new area that is significantly affecting cancer remission rates. One
challenge of immunotherapy approaches is that the elicited immune responses are not always predictable and can vary
from person to person and protocol to protocol. There exists a significant need to develop biomarker tools to monitor
these drugs and their effects. Circulating (serum and plasma) protein biomarkers have the potential to be used in the field
of immuno-oncology to stratify patients, predict response, predict recurrence, reveal mechanism of action and monitor
for adverse effects. One technical challenge facing the immuno-oncology drug development process has been the
availability of immunoassays with sufficient sensitivity to measure immunomodulatory biomarkers directly in serum and
plasma. We have developed a set of over 100 tumor biomarker and immune modulation assays (cytokines and
chemokines) that can be used to monitor tumor proliferation and host immune response. In particular key immune
regulatory cells (T-regs, dendritic cells, macrophages) secrete very low amounts of the protein Interferon gamma
(IFN-gamma) and these levels cannot be reliably measured in serum and plasma using conventional, immunoassay
technology, however they can be tracked with our Simoa IFN-gamma assay. Additionally, we have developed an
ultra-sensitive assay for IL-6, which is one of the cytokines commonly measured for monitoring cytokine release
syndrome as an adverse effect in immunotherapies. Several studies have shown that our ultrasensitive assays can be
valuable tools for monitoring immuno-oncology drugs and protocols.
We also believe residual cancer cell detection post-surgery or post-treatment may significantly improve
outcomes for a variety of cancer types, by helping identify and segment patients at a greater risk of reoccurrence
post-surgery due to residual cancer. For example, we have developed an ultra-sensitive biomarker assay for Prostate
Specific Antigen (PSA) that is over 1,000-fold more sensitive than conventional ELISA assays. This assay is the only
currently available technology that can detect levels of PSA in blood samples of prostate cancer patients shortly
following radical prostatectomy, and we and researchers from Johns Hopkins and NYU conducted a pilot study on the
utility of this assay to predict recurrence of prostate cancer after this procedure. In this study, the blood of prostate
cancer patients taken three to six months following a radical prostatectomy at least five years earlier was analyzed with
Simoa. The majority of samples had PSA levels below the detectable limits of traditional PSA assays. Our Simoa
technology, however, was able to detect and quantify PSA levels in all samples. As shown in the following graph, the
study demonstrated that the PSA assay using our Simoa technology has the potential to be highly predictive of prostate
cancer recurrence over a five-year period. This has the potential to be a powerful prognostic tool, and allowing adjuvant
radiation treatment to be targeted only to the men who actually would benefit.
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COVID-19
In view of the COVID-19 pandemic, in 2020 we determined that our cytokine assay technology could provide
researchers with important and differentiated tools to study disease progression, cytokine release syndrome, and patient-
treatment response in the fight against COVID-19, and began developing a SARS-CoV-2 semi-quantitative IgG assay
and a SARS-CoV-2 antigen detection assay and prototyping a high-definition multiplex SARS-CoV-2 serology assay.
In December 2020, the FDA issued an EUA for our Simoa Semi-Quantitative SARS-CoV-2 IgG Antibody Test
that is run on our HD-X instrument. This test targets antibodies that are directed against the region of the novel
coronavirus known as the spike protein. The spike protein contains multiple subunits which together mediate entry of the
virus into human cells, and for this reason, many candidate and authorized COVID-19 vaccines are designed to elicit an
antibody response to the spike protein. Accordingly, we believe that this test may be useful for measuring the antibody
response to vaccine therapy. The assay may also be used for measurement of IgG antibodies in patients suspected of
previous infection or recent SARS-CoV-2 exposure. The test provides a numerical result representing the concentration
of antibodies from 0.21 to 250 mg/mL. In clinical studies, the test demonstrated a 100% positive percent agreement
(sensitivity) and 99.2% negative percent agreement (specificity) 15 or more days following a positive PCR test.
In January 2021, the FDA issued an EUA for our Simoa SARS-CoV-2 N Protein Antigen Test that is also run
on our HD-X instrument. This test detects the presence of the SARS-CoV-2 virus nucleocapsid protein (or N protein)
which is known to be elevated in respiratory fluids during the initial acute phase of the infection. We believe that direct
detection of antigen proteins from the virus may be a more meaningful measure of infection status than detection of
RNA by rRT-PCR because genetic material can linger even after the virus has left the body, resulting in increased risk of
false positives. In clinical studies, this test demonstrated a sensitivity of 97.7% and specificity of 100% up to 14 days
following onset of symptoms. Under the current EUA, the test is intended for use with nasopharyngeal (NP) samples in
individuals suspected of COVID-19 infection by their healthcare providers. In September 2021, the FDA expanded the
EUA for our Simoa SARS-CoV-2 N Protein Antigen Test to include testing with nasal swabs and saliva and for
asymptomatic serial testing with nasal swab samples. We are exploring extending the test to home-based sample
collection and pooling to enable larger scale testing.
Inflammation
Inflammation underlies the response of the body to injury in a variety of diseases. Simoa assays can measure
inflammatory and anti-inflammatory molecules in serum and plasma with unprecedented sensitivity. This has the
potential to enable new discoveries into the role of inflammation in the biology of health and disease. Our Simoa
technology measures low levels of inflammatory proteins, including cytokines and chemokines, that characterize a range
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of inflammatory diseases, including Crohn’s disease, asthma, rheumatoid arthritis and neuro-inflammation. We believe
the sensitivity of Simoa technology can provide a clearer picture of the underlying state of the immune response and
disease progression.
Our Simoa technology also has the potential to be used by companies developing anti-inflammatory drugs to
quantify the effect a drug has on a particular inflammatory cytokine and to monitor therapeutic efficacy. For example,
we conducted a study in conjunction with the Mayo Clinic using our Simoa technology on patients with clinically active
Crohn’s disease undergoing anti-TNF-α therapy with Remicade, Humira or Enbrel. As shown in the graph below,
researchers were able to detect and quantify the TNF-α levels of the patients before and after treatment. These levels
were all below the LoD of traditional immunoassays.
We believe that a better understanding of the inflammatory response will be critical to future opportunities for
wellness screening and disease response monitoring. Anti-inflammatory drugs are expensive and can have serious side
effects, such as increased risk of infection. By monitoring biomarkers indicative of response, clinicians may be able to
adjust dose to reduce side effects or increase efficacy.
Cardiology
Heart disease and related cardiovascular ailments remain the leading cause of death in the United States,
contributing to nearly 1 in 4 deaths in the United States, according to the CDC. A significant need remains for early
prediction of heart attacks and other cardiac events. Simoa’s highly sensitive digital measurement capabilities have the
potential to be used to predict early cardiac disease.
Infectious Disease
The ability to detect infectious disease biomarkers before the onset of an immune response, where a virus is
most contagious and multiplying rapidly, is critical for controlling the spread of disease. We believe that our Simoa
technology has the potential to have a significant impact in reducing the spread of infectious diseases by making early
stage detection more specific and widely available.
Today, early detection of infectious disease is conducted using nucleic acid testing to detect the nucleic acid of
the viral or bacterial organism because the levels of infectious disease specific antigens are too low in the early stage of
disease to be detected by traditional immunoassay technology. However, the sensitivity of our single molecule detection
capabilities enables the detection of extremely low levels of infectious disease specific antigens with sensitivity that can
rival the use of nucleic acid testing in this application, without the potential biases inherent in amplification technologies,
such as PCR.
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For example, we have developed a simple Simoa assay with more than 4,000-fold greater sensitivity than
conventional ELISA assays capable of detecting the HIV-specific antigen, p24. This Simoa p24 sensitivity matches the
sensitivity of more expensive and complex nucleic acid testing methods. The following graph shows a comparison that
we conducted in 2011 of the Simoa p24 assay with a commercially available nucleic acid testing method, as well as
two commercially available p24 immunoassay methods for early detection of HIV infection. The Simoa p24 assay
detects infection as early as the nucleic acid testing method (11 days from initial blood draw), and a full week before the
earliest signs of infection by the conventional p24 immunoassay methods. This early detection of acute HIV infection
can be critical for controlling the spread of HIV, as HIV is ten times more infectious in the acute phase.
In addition, we believe the detection of a specific protein is more relevant to the determination of the
pathogenic effect than detection of the organism itself because someone may carry a pathogenic organism with no
pathogenic effect. Researchers have demonstrated that Simoa technology can detect Clostridium difficile (C. diff) toxins
A and B with sensitivities similar to the PCR detection of the C. diff organism itself. Because the C. diff organism does
not always produce toxins, PCR methods that detect the C. diff organism suffer from very high false positive rates,
which may result in incorrect diagnoses and the overuse of antibiotics. We believe that using Simoa to detect the toxins
rather than the organism has the potential to provide a higher level of sensitivity and specificity, greatly reducing false
positives.
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Our Products and Services
Our Quanterix commercial portfolio includes research use only (RUO) instruments, assay kits and other
consumables, and contract research services offered through our Accelerator Laboratory, as follows:
Product
HD-X
Key attributes
•
commercially launched the next-generation HD-X in the second
half of 2019 to replace the HD-1 launched in 2014
• Simoa bead-based platform technology
• most widely referenced ultra-sensitive multiplex immunoassay
platform on market
fully automated, floor-standing instrument
•
• wide dynamic range
• multiplexing capability (up to 6-plex) with small sample volume
•
•
up to 400 samples per eight-hour shift
homebrew capabilities
SR-X
•
commercially launched in December 2017
• Simoa bead-based platform technology
•
•
reader only, benchtop instrument with lower price point
same sensitivity, dynamic range and homebrew capabilities as
HD-X
• multiplexing capability: SR-X currently has up to 6-plex
capability
sample prep and assay protocol flexibility
•
SP-X
•
commercially launched in April 2019
• Simoa planar array platform technology
•
•
reader only, benchtop instrument with lower price point
similar sensitivity, dynamic range and homebrew capabilities as
HD-X
• multiplexing capability: SP-X currently has up to 10-plex
capability
sample prep and assay protocol flexibility
•
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Product
Simoa assays and other consumables
Key attributes
• menu of approximately 80 single-plex and multi-plex
bead-based assay kits includes assays for biomarkers in the areas
of neurology, infectious disease, immunology and oncology
• Two EUA approved SARS-CoV-2 assays
• menu of Simoa planar array reagent kits includes approximately
120 biomarkers ranging from 1-10 analytes per assay in the
areas of immunology and oncology research
homebrew kits containing reagents and supporting user guides
enabling customers to develop custom assays
proprietary Simoa disk with 24 arrays, each containing
approximately 239,000 microwells for Simoa bead-based assays
•
•
Nf-L antibodies and Nf-L ELISA kits
•
sold through our wholly-owned subsidiary, Uman, which we
acquired in 2019
• Nf-L capture/detection antibodies with unparalleled sensitivity
and specificity
• Nf-L ELISA kits for CSF (CE-certified in Europe; RUO outside
of Europe)
• Nf-L ELISA kits for serum (RUO)
•
licensing and supply arrangement with Siemens Healthineers
that will allow Siemens to begin developing blood-based Nf-L
clinical tests for future commercialization
Services
•
contract research services provided through our Accelerator
Laboratory
over 1,700 projects completed to date
extended warranty and service contracts
•
•
• CLIA-certified lab available
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Instruments and Consumables
HD-X
We commercially launched our HD-X instrument in the second half of 2019. The HD-X is an upgraded version
of the Simoa HD-1, our very first instrument, which was launched in January 2014. The HD-X was designed to deliver
significant productivity and operational efficiency improvements, as well as greater user flexibility. The HD-X uses our
Simoa bead-based technology and is the most sensitive automated multiplex protein detection platform commercially
available. Assays for the HD-X are fully automated (i.e., sample in to result out), and results for up to 66 samples are
available in approximately one hour. Samples can be input into the instrument via 96-well microtiter plates or sample
tubes where the system can multiplex and process tests in a variety of assay protocol configurations.
Specialized software controls the Simoa instrumentation, analyzes the digital images produced, and provides
customers with detailed analysis of their samples, such as the concentration of multiple biological molecules. The HD-X
software automates the processes for running the instrument and analyzing data from the user-defined protocols.
Proprietary image analysis software is embedded in the system, which converts the raw images into signals for each
biological molecule being analyzed within a sample. Data reduction software automatically converts those signals to
concentrations for the different biological molecules.
By the end of 2021, approximately 68% of the HD installed base were HD-X instruments.
SR-X
We commercially launched the SR-X instrument in the fourth quarter of 2017. The SR-X utilizes the same
Simoa bead-based technology and assay kits as the HD-X in a compact benchtop form with a lower price point designed
to address the needs of researchers who value the ultra-sensitive detection capabilities enabled by Simoa.
In contrast to the fully automated workflow of the HD-X, the assay incubation and washing steps for the SR-X
are performed outside of the instruments using conventional liquid handling methods. The offline sample prep provides
additional flexibility to enable researchers to apply Simoa detection in an expanded range of applications including
direct detection of nucleic acids. The SR-X system automates the steps loading Simoa beads onto Simoa disks with
subsequent imaging, detection and data reduction. Processing time for imaging a 96 well plate is approximately
2.5 hours.
SP-X
We commercially launched the SP-X instrument in April 2019. The SP-X uses the Simoa planar array
technology developed initially by Aushon for multiplex chemiluminescent immunoassay measurement, which we
refined by leveraging our proprietary sophisticated Simoa image analysis and data analysis algorithms to provide the
same Simoa sensitivity found in our Simoa bead-based platform. The Simoa planar array technology utilizes a 96-well
microtiter plate with up to 10 different assay measurements performed in each well of the plate from as little as
12.5 microliters of sample.
Similar to the SR-X, the assay prep workflow utilized for the SP-X involves assay incubation and washing steps
performed outside of the instrument using the same conventional liquid handling methods as the SR-X. The SP-X
instrument automates the imaging, detection and data reduction process. Processing time for imaging a 96 well plate is
less than five minutes.
Simoa Assays and Consumables
Recurring revenue is derived through the sale of consumables used to run assays on our instruments, and from
our growing menu of Simoa digital biomarker assays. The current menu of approximately 80 analyte-specific single-plex
and multi-plex assay kits for our bead-based instruments includes assays for biomarkers in the areas of neurology,
infectious disease, immunology and oncology for both human and mouse samples. The current menu of assay kits for the
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planar array instrument includes approximately 120 biomarkers ranging from 1-10 analytes per assay in the areas of
immunology and oncology research.
In addition to these assays we have developed, both of the Simoa platforms allow ease and flexibility in assay
design, enabling our customers to develop their own proprietary in-house assays, called homebrew assays, using our
homebrew assay kits. These kits include all components required for customers to run tests using their own antibodies.
Our consumables portfolio for our bead-based platform also includes our proprietary Simoa disks that are unique to our
bead-based platform, as well as cuvettes and disposable tips. Our goal is to continue to add to our assay kits to extend
our application base.
We have staffed our assay development and manufacturing teams to do the upfront work of antibody sourcing,
assay development and optimization, sample testing and validation, transfer to manufacturing and final documentation.
We outsource some of our assay development activities to other antibody and/or assay development providers and
expect to continue to do so to achieve our aggressive menu expansion goals.
Nf-L Antibodies and Nf-L ELISA Kits
In August 2019, we completed our acquisition of Uman. Uman supplies Nf-L antibodies and ELISA kits for
Nf-L detection. Uman’s Nf-L antibodies are widely recognized by researchers and biopharmaceutical and diagnostics
companies worldwide as the premier solution for the detection of Nf-L to advance the development of therapeutics and
diagnostics for neurodegenerative conditions. Through Uman we sell proprietary Nf-L capture and detection antibodies,
as well as two Nf-L ELISA kits for CSF, one of which is CE-certified in Europe, and one RUO Nf-L ELISA kit for
serum.
Services
Through our Accelerator Laboratory, which includes a CLIA-certified laboratory, we provide customers a
contract research option. Researchers, academics and principal investigators can work with our scientists to test
specimens with existing Simoa assays, or prototype, develop and optimize new assays. The Accelerator Laboratory
supports multiple projects and services, including:
•
Sample testing. Utilizing commercially available Simoa kits, we have run large studies for customers with
thousands of specimens and small experiments with just a few samples. The sample protocol can be
tailored precisely to the customer’s needs and even large studies can be run quickly. We have extensive
experience testing many different sample types where biomarkers may be present at very low levels.
• Homebrew assay development. Utilizing proprietary or commercially available reagents in combination
with our Homebrew Assay Development Kit, we can rapidly develop a prototype assay exhibiting
improved sensitivity compared to traditional ELISA. The Accelerator Laboratory can also be used to screen
reagents to identify the optimal assay format or expand prototype efforts for further assay optimization or
validation to ultimately deliver the highest level of performance.
• Custom development. After identifying the optimal assay and conditions, the Accelerator Laboratory can be
used to generate qualified bulk reagents or custom assay kits, providing customer access to validated kits
for assays not yet commercially available on the Simoa platform.
To date, we have completed over 1,700 projects for approximately 400 customers from all over the world using
our Simoa platforms, including over 150 projects for clinical studies. In addition to being an important source of
revenue, we have also found the Accelerator Laboratory to be a significant catalyst for placing additional instruments, as
a number of customers for whom we have provided contract research services have subsequently purchased an
instrument from us.
We also generate revenues through extended-warranty and service contracts for our installed base of
instruments.
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Research and Development
We continually seek to improve our platform and technology to enable more sensitive detection and
measurement of biological molecules. This evaluation includes examining new assay formats and instrumentation
improvements and upgrades to increase the performance of our Simoa assays and instruments. We believe that
sensitivity is so important that we have published an approach to increase the sensitivity of our Simoa technology – in
some cases as much as 100-fold, and we intend to launch a beta program using this more sensitive technology in our
Accelerator Laboratory by the end of 2022. We are also focused on expanding our assay menu to extend the scope of
applications for our platform and grow our customer base. Our assay menu expansion is driven by a number of factors,
including input from key opinion leaders, customer feedback, homebrew projects, Accelerator Laboratory projects, new
publications on biomarkers of industry interest, and feedback from our sales and marketing team. We also intend to
continue to develop and market new instruments with different and/or improved capabilities in order to further broaden
our market reach.
Sales and Marketing
We distribute our Simoa instruments and consumables via direct field sales and support organizations located in
North America and Europe and through a combination of our own sales force and third-party distributors in additional
major markets, including Australia, Brazil, China, Czech Republic, India, Hong Kong, Israel, Japan, New Zealand,
Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan, and UAE. In addition, we sell Uman’s Nf-L
antibodies and Nf-L ELISA kits directly, and in conjunction with a distributor worldwide. Our domestic and
international sales force informs our current and potential customers of current product offerings, new product and new
assay introductions, and technological advances in Simoa systems, workflows, and notable research being performed by
our customers or ourselves. As our primary point of contact in the marketplace, our sales force focuses on delivering a
consistent marketing message and high level of customer service, while also attempting to help us better understand
evolving market and customer needs.
As of December 31, 2021, we had 135 full-time people employed in sales, sales support and marketing,
including technical field application scientists and field service personnel. This staff is primarily located in North
America and Europe. We intend to significantly expand our sales, support, and marketing efforts in the future by
expanding our direct footprint in Europe as well as developing a comprehensive distribution and support network in
China where significant new market opportunities exist. Additionally, we believe that there is significant opportunity in
other Asia-Pacific region countries such as South Korea and Australia as well as in South America. We plan to expand
into these regions via initial penetration with distributors and then subsequent support with Quanterix-employed sales
and support personnel.
Our sales and marketing efforts are targeted at key opinion leaders, laboratory directors and principal
investigators at leading biotechnology and pharmaceutical companies and governmental research institutions.
In addition to our selling activities, we align with key opinion leaders at leading institutions and clinical
research laboratories to help increase scientific and commercial awareness of our technologies, demonstrate the benefits
relative to existing technologies and accelerate adoption. We also seek to increase awareness of our products through
participation at trade shows, academic conferences, online webinars and dedicated scientific events attended by
prominent users and prospective customers.
Our systems are relatively new to the life science marketplace and require a capital investment by our
customers. The sales process typically involves numerous interactions and demonstrations with multiple people within
an organization. Some potential customers conduct in-depth evaluations of the system including running experiments in
the Accelerator Laboratory and comparing results from competing systems. In addition, in most countries, sales to
academic or governmental institutions require participation in a tender process involving preparation of extensive
documentation and a lengthy review process. As a result of these factors and the budget cycles of our customers, our
sales cycle, the time from initial contact with a customer to our receipt of a purchase order, can often be six to
12 months, or longer.
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Manufacturing and Supply
Our manufacturing strategy has two components: to outsource the Simoa bead-based instrument development
and manufacturing with industry leaders, and to internally develop and manufacture our planar array instrument and all
assay kits in our own facilities.
Instruments
The HD-X instrument is manufactured by STRATEC Biomedical AG (STRATEC), based in Birkenfeld,
Germany, and is manufactured and shipped from their Birkenfeld and Beringen, Switzerland facilities. See “—Key
Agreements—Development Agreement and Supply Agreement with STRATEC” for a description of our agreement with
STRATEC. The SR-X is manufactured by Paramit Corporation (Paramit), based in Morgan Hill, California, and is
shipped to our global customers by Paramit. See “—Key Agreements—Paramit Manufacturing Services Agreement” for
a description of our agreement with Paramit. Installation of, and training on, our instruments is provided by our
employees in the markets where we conduct direct sales, and by distributors in those markets where we operate with
distributors.
We believe this manufacturing strategy is efficient and conserves capital. However, in the event it becomes
necessary to utilize a different contract manufacturer for the HD-X or the SR-X, we would experience additional costs,
delays and difficulties in doing so, and our business could be harmed.
The SP-X instruments are manufactured, tested, shipped and supported by us from our Billerica, Massachusetts
facility. All internal components are sourced domestically except one significant component is sourced in Germany.
These components are sourced from a limited number of suppliers, including certain single-source suppliers. Although
we believe that alternatives would be available, it would take time to identify and validate replacement components,
which could negatively affect our ability to supply instruments on a timely basis.
Consumables
We assemble our assay kits for our bead-based platform in our Billerica, Massachusetts facility. Reagents for
our bead-based assays include all components required to run an enzyme based immunoassay, such as beads, capture and
detector reagents, enzyme reagents and enzyme substrate. These reagents are sourced from a limited number of
suppliers, including certain single-source suppliers. Although we believe that alternatives would be available, it would
take time to identify and validate replacement reagents for our assay kits, which could negatively affect our ability to
supply assay kits on a timely basis. In an effort to mitigate this risk through inventory control, we have increased the
shelf life of the vast majority of our bead-based assays from six months to 12 months or more.
Simoa disks for our bead-based platform are supplied through a single source supplier pursuant to a long-term
supply agreement with STRATEC Consumables, a subsidiary of STRATEC Biomedical. We believe that this agreement
provides for a sufficient notification period to allow for supply continuity and the identification and tech transfer to a
new supplier in the event either party wishes to terminate the relationship. Our cuvettes for our bead-based platform are
single sourced through STRATEC Biomedical, and the disposable tips used in our bead-based platform are
commercially available.
We assemble our 96 well sample plate kits for our planar array platform in our Billerica, Massachusetts facility.
Reagents for our planar array assays include all components required to run an enzyme-based chemiluminescent
immunoassay, such as capture antibody printed plates and detector reagents, enzyme reagents and enzyme substrate.
These reagents are sourced from a limited number of suppliers, including certain single-source suppliers. Although we
believe that alternatives would be available, it would take time to identify and validate replacement reagents for our
assay kits, which could negatively affect our ability to supply assay kits on a timely basis. Because our planar array
assays have a shelf life of 12 months, we believe we are able to mitigate this risk through inventory control.
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Nf-L antibodies and Nf-L ELISA Kits
The storage of Uman’s proprietary Nf-L antibody producing hybridomas as well as the cultivation and
purification of the antibodies is outsourced to a contract manufacturer, and bulk material of purified antibodies is
delivered to Uman’s site in Umeå, Sweden. Functional testing and verification of concentration are performed at Uman
before the material is approved for use in production activities. The antibodies can be aliquoted and sold as single
reagents or used for the production of Uman’s Nf-L ELISA kits. The antibody reagents are labeled and released to
market after testing. The contract manufacturer of antibodies is audited regularly, and we have entered into a written
supply agreement with the contract manufacturer. The current shelf-life of the antibodies is 18 months.
All components in Uman’s Nf-L ELISA kits are manufactured in-house at Uman from starting materials
sourced from suppliers that have been evaluated and approved. Uman has entered into supply agreements with critical
suppliers. All incoming goods are subject to receipt control and any deviations related to quality deficiencies are
registered. The kit components include buffers (sample diluent and wash solution), an ELISA 96-well plate coated with a
capture antibody, detector antibody, streptavidine conjugate, substrate (TMB) and stop reagent. The kit components are
labeled (either “RUO” or “CE”) and assembled. The final ELISA kit product is subject to quality control which include
testing of human CSF quality control samples to assure a high batch consistency. After testing and batch record review,
the material is released to market. The current shelf-life of the kits is 18 months.
Key Agreements
Development Agreement and Supply Agreement with STRATEC
In August 2011, we entered into a Strategic Development Services and Equity Participation Agreement (the
STRATEC Development Agreement) with STRATEC, pursuant to which STRATEC undertook the development of the
Simoa HD instrument. Under the STRATEC Development Agreement, we were required to pay a fee and issue to
STRATEC warrants to purchase our equity securities, all of which have been exercised as of December 31, 2017. These
fees and warrants were subject to a milestone based payment schedule. The STRATEC Development Agreement was
amended in November 2016. The Amendment reduced our obligation to satisfy a minimum purchase commitment under
the STRATEC Supply Agreement described below. Additionally, the parties agreed on additional development services
for an additional fee, which is payable when the additional development is completed. This fee includes the final
milestone payment that was associated with the final milestone due under the terms of the STRATEC Development
Agreement. The services were completed in and the final milestone payment was paid in the fourth quarter of 2019. The
STRATEC Development Agreement may be terminated on the insolvency of a party, for an uncured material breach, or,
by us, on a change of control of our company (subject to certain obligations to compensate STRATEC on such
termination) or if we and STRATEC are unable to agree on pricing of the instrument, within certain parameters.
In September 2011, we also entered into a Supply and Manufacturing Agreement with STRATEC (the
STRATEC Supply Agreement), pursuant to which STRATEC agreed to supply HD instruments to us, and we agreed to
procure those instruments exclusively from STRATEC, subject to STRATEC’s ability to supply the instruments. We are
responsible for obtaining any regulatory approval necessary to sell the instruments. We agreed to purchase a certain
number of instruments in the seven years following the acceptance of the first validation instrument. The STRATEC
Supply Agreement was amended in November 2016 to reduce the number of HD instruments we were committed to
procure from STRATEC, and this commitment has been met. The instrument price stipulated in the STRATEC Supply
Agreement was established based on certain specified assumptions and is subject to certain adjustments.
The STRATEC Supply Agreement is terminable by either party on 12 months’ notice to the other party,
provided that neither party may terminate the STRATEC Supply Agreement prior to the later of the seven year
anniversary of the acceptance of the first prototype instrument and the purchase of the minimum number of instruments
which we were committed to procure. The STRATEC Supply Agreement may also be terminated on the insolvency of a
party or the uncured material breach of a party, or, by us, on a change of control of our company (subject to certain
obligations to compensate STRATEC on such termination). On termination by us for STRATEC’s insolvency or
uncured material breach or termination by STRATEC for convenience, we are granted a nonexclusive royalty free
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license of STRATEC intellectual property to manufacture the instruments. In certain of these circumstances, we could be
obligated to issue warrants to purchase common stock.
Paramit Manufacturing Services Agreement
In November 2016, we entered into a Manufacturing Services Agreement (the Paramit Agreement) with
Paramit. Under the terms of the Paramit Agreement, we engaged Paramit to produce and test our SR-X instrument on an
as-ordered basis. We also engaged Paramit to supply spare parts. Paramit has no obligation to manufacture our
instrument without a purchase order and no obligation to maintain inventory in excess of any open purchase orders or
materials in excess of the amount Paramit reasonably determines will be consumed within 90 days or within the lead
time of manufacturing our instrument, whichever is greater. We have an obligation to purchase any material or
instruments deemed in excess pursuant to the Paramit Agreement. The price is determined according to a mutually
agreed-upon pricing formula. The parties agreed to review the pricing methodology yearly or upon a material change in
cost.
The Paramit Agreement has an initial three-year term with automatic one year extensions. It is terminable by
either party for convenience with written notice to the other party given at least nine months prior to the end of the
then-current term. The agreement may also be terminated by us with three months’ notice to Paramit upon the
occurrence of (i) a failure of Paramit to obtain any necessary governmental licenses, registrations or approvals required
to manufacture our instrument or (ii) an assignment by Paramit of its rights or obligations under the agreement without
our consent. The Paramit Agreement is terminable by Paramit with 30 days’ notice to us in the event of a material breach
after written notice and a 60-day opportunity to cure the breach.
Non-Exclusive License Agreement with Abbott Laboratories
In September 2020, we entered into a Non-Exclusive License Agreement with Abbott. Pursuant to the terms of
the License Agreement, we granted Abbott a non-exclusive, worldwide, royalty-bearing license, without the right to
sublicense, under our bead-based single molecule detection patents in the field of IVD. Abbott paid us an initial license
fee of $10.0 million in connection with the execution of the License Agreement. Abbott has also agreed to pay us
milestone fees subject to the achievement by Abbott of certain development, regulatory and commercialization
milestones and low single digit royalties on net sales of licensed products.
The License Agreement includes customary representations and warranties, covenants and indemnification
obligations for a transaction of this nature. The License Agreement became effective upon signing and will continue
until expiration of the last-to-expire licensed patent, or the agreement is earlier terminated. Under the terms of the
License Agreement, each party has the right to terminate the agreement for uncured material breach by, or insolvency of,
the other party. Abbott may also terminate the License Agreement at any time without cause upon sixty (60) days’
notice.
Contracts with the NIH under RADx
In September 2020, we entered into the Rapid Acceleration of Diagnostics (RADx) workplan 2 award (WP2)
with the National Institute of Health (NIH) under the RADx program. This contract, which has a total award value of up
to $18.2 million, is intended to accelerate the continued development, scale-up and deployment of our novel
SARS-CoV-2 antigen test. Initial early feasibility of this test was funded in part through the RADx workplan 1 award
(WP1) we were granted in June 2020. WP2 supports clinical validation of the test in support of the EUA submissions
with the FDA, and provides funding to expand assay kit manufacturing capacity and commercial deployment
readiness. Contract funding was subject to achievement of pre-defined milestones and the contract period ran through
September 2021, with one milestone extended to March 31, 2022. As of December 31, 2021, we had received
$17.7 million out of the full $18.2 million under WP2.
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Competition
We compete with both established and development-stage life science companies that design, manufacture and
market instruments for protein discovery, detection, nucleic acid detection and additional applications. For example,
companies such as Bio-Techne, Luminex, MesoScale Discovery, Gyros, Nanostring, O-Link, SEER, Somalogic,
MilliporeSigma, Bio-Rad Laboratories, Thermo Fisher Scientific, and others, have products for protein discovery or
detection that compete in certain segments of the market in which we sell our products. Our Accelerator Laboratory
competes with other research laboratories such as Covance, Q2 Solutions, Myriad RBM, Monogram Biosciences,
PPD Laboratories, and others, some of whom are customers of ours. In addition, as we or our partners expand the
applications for our products to include diagnostics and precision health screening, we expect to compete with
companies such as Siemens, Abbott, Roche, Ortho Clinical Diagnostics and Thermo Fisher Scientific. Furthermore, our
technology and products are showing promise for non-invasive early disease detection, and in the future, we could
experience competition from companies that develop and market imaging and other molecular detection technologies. In
addition, a number of other companies and academic groups are in the process of developing novel technologies for the
life science research, diagnostic and precision health screening markets. Many of the companies with which we compete
or will compete have substantially greater resources than we have.
The life science instrumentation and lab services industries are highly competitive and expected to grow more
competitive with the increasing knowledge gained from ongoing research and development. We believe the principal
competitive factors in our target markets include:
•
•
•
•
•
•
•
sensitivity;
cost of instruments and consumables;
assay menu;
reputation among customers and key opinion leaders;
innovation in product offerings;
accuracy and reproducibility of results; and
customer support infrastructure.
We believe that we are well positioned with respect to these competitive factors and expect to enhance our
position through ongoing global expansion, innovative new product introductions and ongoing collaborations and
partnerships with key opinion leaders.
Intellectual Property
Our core Simoa bead-based technology, directed to general methods and devices for single molecule detection,
originated at Tufts University (Tufts), in the laboratory of Professor David Walt, who is the founder of Quanterix and a
current member of our Board of Directors. Prof. Walt and his students pioneered the single molecule array technology,
including technologies that enabled the detection of single enzyme labels in arrays of microwells, thereby facilitating the
ultra-sensitive detection of proteins, nucleic acids, and cells. We have exclusively licensed from Tufts the relevant patent
filings related to these technologies. (See “—License Agreement with Tufts University” below). In addition to licensed
patents, we have developed our own portfolio of issued patents and patent applications directed to commercial products
and technologies for potential development. Our portfolio also includes issued patents and patent applications acquired
as part of our 2017 acquisition of Aushon Biosystems. We believe our proprietary platforms are a core strength of our
business and our strategy includes the continued development of our patent portfolio.
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Our patent strategy is multilayered, providing coverage of aspects of the core technology as well as specific
uses and applications, some of which are reflected in our current products and some of which are not. The first layer is
based on protecting the fundamental methods for detecting single molecules independent of the specific analyte to be
detected. The second layer covers embodiments of the core technology directed to the detection of specific analytes. The
third layer protects novel instrumentation, consumables, and manufacturing processes used in applying the invention to
certain commercial products or future product opportunities. The fourth layer is concerned with specific uses of the core
technology (e.g., biomarkers and diagnostics). Our patent strategy is both offensive and defensive in nature; seeking to
protect not only technology we currently practice but also alternative, related embodiments.
Simoa and Related Technology
As of February 1, 2022, we had exclusively licensed 18 patents and two patent applications from Tufts. These
patents and patent applications include nine issued U.S. patents and two pending U.S. patent applications, three granted
European patents, three granted Japanese patents, two granted Canadian patents and one granted Australian patent.
A first patent family licensed from Tufts is directed to methods for detecting single molecules. This patent
family includes seven granted U.S. patents, one pending U.S. patent application, three granted European patents (each
nationalized and active in seven or eight countries), three granted Japanese patents, two granted Canadian patents and
one granted Australian patent. The standard patent expiration date for U.S. patents in this family is February 16, 2027,
and for the non-U.S. patents is February 20, 2027 or August 30, 2027.
A second patent family licensed from Tufts is directed to methods for detecting the presence of target analytes
in multiple samples. This patent family includes one granted U.S. patent. The standard patent expiration date for the
U.S. patent in this family is August 22, 2025.
A third patent family licensed from Tufts is directed to electro-optical systems including an array and a plurality
of electrodes. This patent family includes one granted U.S. patent. The standard patent expiration date for the U.S. patent
in this family is February 14, 2023.
A fourth patent family licensed from Tufts is directed to methods for detecting short nucleic acids. This patent
family includes one pending U.S. patent application. The standard patent expiration date for the U.S. patent in this
family is May 29, 2039.
As of February 1, 2022, we owned 27 issued U.S. patents and 17 pending U.S. patent applications, six granted
European patents and three pending European patent applications, six granted Japanese patents, four granted Chinese
patents and one pending Chinese patent application, three granted Canadian patents and one pending Canadian patent
application, two registered Hong Kong patent applications, and one Patent Cooperation Treaty Application.
A first patent family owned by us is directed to methods for determining a measure of the concentration of
analyte molecules or particles in a fluid sample, and in particular to methods for analyte capture on beads, including
multiplexing. This patent family includes four granted U.S. patents and two pending U.S. patent applications, three
granted European patents (nationalized and active in eight countries) and one pending European application, two granted
Japanese patents, two granted Chinese patents, and one granted Canadian patent. The standard patent expiration date for
the U.S. patents in this family is March 24, 2030, and for the non-U.S. patents is March 1, 2031.
A second patent family owned by us is directed to methods and systems for determining a measure of the
concentration of analyte molecules or particles in a fluid sample, and in particular to methods or systems for determining
concentration based on either counting or measured intensity (extending the dynamic range). This patent family includes
five granted U.S. patents and one pending U.S. patent application, one granted European patent (nationalized and active
in seven countries), two granted Japanese patents, one granted Chinese patent, and one granted Canadian patent. The
standard patent expiration date for the U.S. patents in this family is March 24, 2030, and for the non-U.S. patents is
March 1, 2031.
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A third patent family owned by us is directed to methods for determining a measure of the concentration of
analyte molecules or particles in a fluid sample, and in particular to methods for analyte capture on beads with or without
dissociation. This patent family includes two granted U.S. patents. The standard patent expiration date for the
U.S. patents in this family is September 28, 2028.
A fourth patent family owned by us is directed to methods for determining a measure of the concentration of
analyte molecules or particles in a fluid sample, and in particular to methods for determining concentration using
multiple binding ligands for the same analyte molecule. This patent family includes one granted U.S. patent. The
standard patent expiration date for the U.S. patent in this family is March 24, 2030.
A fifth patent family owned by us is directed to instruments and consumables. This patent family includes
two granted U.S. patents and one pending U.S. patent application, two granted Japanese patents, one granted Chinese
patent and one pending Chinese patent applications, one registered Hong Kong patent application and one pending
patent application in each of Europe and Canada. The standard patent expiration date for any U.S. patents that may issue
from this family is February 25, 2031, and for any non-U.S. patents is January 27, 2032.
A sixth patent family owned by us is directed to methods and materials for covalently associating a molecular
species with a surface. This patent family includes one pending U.S. patent application. The standard patent expiration
date for any U.S. patents that may issue from this family is May 9, 2034.
A seventh patent family owned by us is directed to methods for improving the accuracy of capture based assays.
This patent family includes one pending U.S. patent application. The standard patent expiration date for any U.S. patents
that may issue from this family is January 13, 2036.
An eighth patent family owned by us is directed to methods and systems for reducing and/or preventing signal
decay. This patent family includes one pending U.S. patent application. The standard patent expiration date for any
U.S. patents that may issue from this family is September 20, 2038.
A ninth patent family owned by us is directed to methods and systems for highly sensitive assays, including
methods and systems for improving capture object loading efficiency and/or use of low numbers of capture objects in
assays. This patent family includes one pending Patent Cooperation Treaty patent application. If we pursue protection
by filing any national stage applications, the standard patent expiration date for any patents that may issue from this
family will be in 2041.
We own or co-own ten patent families directed to the measurement of particular types of analytes, including
β-amyloid peptide, tau protein, toxin B of C. difficile, neurofilament light, glial fibrillary acidic protein, ubiquitin
carboxyl-terminal hydrolase L1, antigens from infectious organisms such as viruses (e.g., coronaviruses), and DNA or
RNA molecules. These families include one granted U.S. patent directed to methods for determining treatment protocols
and/or a prognosis of a patient’s recovery from a brain injury based on measurements of tau protein in blood and one
granted European patent (nationalized and active in three countries) directed to detection of C. difficile. Any patents that
may issue from these patent applications would have standard expiration dates between 2032 and 2041.
With the acquisition of Aushon in January 2017, we acquired their patent portfolio for our planar array
technology. As of February 1, 2022, the acquired patent portfolio includes at least ten issued U.S. patents and one
pending U.S. patent application, one granted Canadian patent, one granted European patent (nationalized and active in
eight countries) and one pending European patent application, and one registered Hong Kong patent.
We have licensed additional patents and patent applications from third parties.
In addition to pursuing patents on our technology, we have taken steps to protect our intellectual property and
proprietary technology by entering into confidentiality agreements and intellectual property assignment agreements with
our employees, consultants, corporate partners and, when needed, our advisors.
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License Agreement with Tufts University
In June 2007, as amended in April 2013, August 2017, and September 2020, we entered into a license
agreement with Tufts, pursuant to which we obtained an exclusive, worldwide license to research, develop,
commercialize, use, make, or have made, import or have imported, distribute or have distributed, offer or have offered,
and sell or have sold products and services covered by patent rights to the Simoa bead-based technology owned by Tufts,
as well as a non-exclusive license to related know-how. The rights licensed to us are for all fields of use and are
sublicensable for a fee.
Under the terms of the agreement, as amended, we paid a one-time, non-refundable upfront fee and issued Tufts
shares of our common stock. In addition, in connection with the April 2013 amendment, we issued Tufts shares of our
Series C-1 Preferred Stock, which converted into shares of our common stock in connection with our initial public
offering. We are required to pay Tufts low single-digit royalties on all net sales of products and services that use the
licensed technology, as well as a portion of any sublicensing revenues. We are also obligated to pay annual maintenance
fees, which are fully creditable against any royalty payments made by us, and a milestone payment upon any sublicense
by us. We were also required to reimburse Tufts for all patent prosecution cost incurred prior to the agreement and for all
future patent prosecution costs.
The term of the license agreement will continue on a country-by-country basis so long as there is a valid claim
of a licensed patent in such country. Tufts may terminate the agreement or convert to a non-exclusive license in the event
(1) we fail to pay any undisputed amount when required and fail to cure such non-payment within 60 days after receipt
of notice from Tufts, (2) we are in breach of any material provision of the agreement and fail to remedy such breach
within 60 days after receipt of notice from Tufts, (3) we do not demonstrate diligent efforts to develop a product
incorporating the licensed technology, (4) we are found on five separate audits to have underpaid pursuant to the terms
of the agreement, (5) we cease to carry on the business related to the licensed technology either directly or indirectly, or
(6) we are adjudged insolvent, make an assignment for the benefit of creditors or have a petition in bankruptcy filed for
or against us that is not removed within 60 days. We may terminate the agreement at any time upon at least 60 days’
written notice. Upon termination of the agreement, all rights revert to Tufts.
Government Regulation
Other than the COVID assays for which we have received EUAs, our products are currently intended for
research use only (RUO) applications, although our customers may use our products to develop their own products that
are subject to regulation by the FDA or the Center for Medicare and Medicaid Services (CMS). Although most products
intended for RUO are not currently subject to clearance or approval by the FDA, RUO products are subject to FDA’s
premarket review requirements if they are determined to be intended for use for clinical rather than research purposes.
Consequently, our products (other than the COVID assays for which we have received EUAs) are labeled “For Research
Use Only.”
On November 25, 2013, the FDA issued Final Guidance for Industry and Food and Drug Administration Staff
on “Distribution of In Vitro Diagnostic Products Labeled for Research Use Only or Investigational Use Only”
(RUO/IUO Guidance). The purpose of an FDA guidance document is to provide the FDA’s current thinking on when
IVD products are properly labeled for RUO or for IUO, but as with all FDA guidance documents, this guidance does not
establish legally enforceable responsibilities and should be viewed as recommendations unless specific regulatory or
statutory requirements are cited. The RUO/IUO Guidance explains that the FDA will review the totality of the
circumstances when evaluating whether equipment and testing components are properly labeled as RUO. Merely
including a labeling statement that a product is intended for research use only will not necessarily exempt the device
from the FDA’s 510(k) clearance, premarket approval, or other requirements, if the circumstances surrounding the
distribution of the product indicate that the manufacturer intends its product to be used for clinical diagnostic use. These
circumstances may include written or verbal marketing claims or links to articles regarding a product’s performance in
clinical applications, a manufacturer’s provision of technical support for clinical validation or clinical applications, or
solicitation of business from clinical laboratories, all of which could be considered evidence of intended uses that
conflict with RUO labeling. Although the RUO/IUO Guidance is a statement of the FDA’s thinking with respect to
certain RUOs and IUOs in 2013 and was not intended as a compliance requirement, we believe that our labeling and
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promotion of our products, including the custom assay RUO products developed by the Accelerator Laboratory, is
consistent with the RUO/IUO Guidance because we have not promoted our products for clinical use in humans. We also
are not promoting or using our products in the development or promotion of laboratory developed test (LDT) services.
When we develop products for clinical use, we will do so in accordance with FDA requirements applicable to those
products at that time. Separately, when we become aware that accredited or licensed clinical laboratories may be using
our RUO products either for research or clinical uses, such as part of LDT services, in accordance with the regulations
that apply to clinical laboratories, we will continue to review the labeling and promotion of our products for consistency
with the RUO/IUO Guidance.
When our products are marketed for clinical diagnostic use, our products will be regulated by the FDA as
medical devices. The FDA defines a medical device in part as an instrument, apparatus, implement, machine,
contrivance, implant, in vitro reagent, or other similar or related article which is intended for the diagnosis of disease or
other conditions or in the cure, mitigation, treatment, or prevention of disease in man. This means that the FDA will
regulate the development, testing, manufacturing, marketing, post-market surveillance, distribution, advertising and
labeling of our clinical products and we will be required to register as a medical device manufacturer and list our
marketed products.
The FDA classifies medical devices into one of three classes on the basis of the intended use of the device, the
risk associated with the use of the device for that indication, as determined by the FDA, and on the controls deemed by
the FDA to be necessary to reasonably ensure their safety and effectiveness. Class I devices, which have the lowest level
of risk associated with them, are subject to general controls. Class II devices are subject to general controls and special
controls, including performance standards. Class III devices, which have the highest level of risk associated with them,
are subject to general controls and premarket approval. Most Class I devices and some Class II devices are exempt from
a requirement that the manufacturer submit a premarket notification (510(k)) and receive clearance from the FDA which
is otherwise a premarketing requirement for a Class II device. Class III devices may not be commercialized until a
premarket approval application (PMA) is submitted to and approved by the FDA.
510(k) Clearance Pathway
To obtain 510(k) clearance, a sponsor must submit to the FDA a premarket notification demonstrating that the
device is substantially equivalent (SE), to a device legally marketed in the U.S. for which a PMA was not required. The
FDA is supposed to make a SE determination within 90 days of FDA’s receipt of the 510(k), but it often takes longer if
the FDA requests additional information. Most 510(k)s do not require supporting data from clinical trials, but the FDA
may request such data. After a device receives 510(k) clearance, any modification that could significantly affect its
safety or effectiveness, or that would constitute a major change in its intended use, will require a new clearance or
possibly a pre-market approval.
De Novo Classification
Medical device types that the FDA has not previously classified as Class I, II or III are automatically classified
into Class III regardless of the level of risk they pose. The Food and Drug Administration Modernization Act of 1997
established a new route to market for low to moderate risk medical devices that are automatically placed into Class III
due to the absence of a predicate device, called the “Request for Evaluation of Automatic Class III Designation,” or the
de novo classification procedure.
This procedure allows a manufacturer whose novel device is automatically classified into Class III to request
down-classification of its medical device into Class I or Class II on the basis that the device presents low or moderate
risk, rather than requiring the submission and approval of a PMA application. Prior to the enactment of the Food and
Drug Administration Safety and Innovation Act of 2012 (FDASIA), a medical device could only be eligible for de novo
classification if the manufacturer first submitted a 510(k) premarket notification and received a determination from the
FDA that the device was not substantially equivalent. FDASIA streamlined the de novo classification pathway by
permitting manufacturers to request de novo classification directly without first submitting a 510(k) premarket
notification to the FDA and receiving a not substantially equivalent determination. Under FDASIA, the FDA is required
to classify the device within 120 days following receipt of the de novo application. If the manufacturer seeks
34
reclassification into Class II, the manufacturer must include a draft proposal for special controls that are necessary to
provide a reasonable assurance of the safety and effectiveness of the medical device. In addition, the FDA may reject the
reclassification petition if it identifies a legally marketed predicate device that would be appropriate for a 510(k) or
determines that the device is not low to moderate risk or that general controls would be inadequate to control the risks
and special controls cannot be developed.
Premarket Approval Pathway
A PMA must be submitted if a new device cannot be cleared through the 510(k) process. The PMA process is
generally more complex, costly and time consuming than the 510(k) process. A PMA must be supported by extensive
data including, but not limited to, technical, preclinical, clinical trials, manufacturing and labeling to demonstrate to the
FDA’s satisfaction the safety and effectiveness of the device for its intended use. After a PMA is sufficiently complete,
the FDA will accept the application for filing and begin an in-depth review of the submitted information. By statute, the
FDA has 180 days to review the accepted application, although review of the application generally can take between one
and three years. During this review period, the FDA may request additional information or clarification of information
already provided. Also, during the review period, an advisory panel of experts from outside the FDA may be convened
to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device.
Although the FDA is not bound by the advisory panel decision, the panel’s recommendations are important to the FDA’s
overall decision making process. In addition, the FDA will conduct a preapproval inspection of the manufacturing
facility to ensure compliance with its quality system regulations (QSRs). New premarket approval applications or
premarket approval application supplements are also required for product modifications that affect the safety and
efficacy of the device.
Emergency Use Authorization
In emergency situations, such as a pandemic, the FDA has the authority to allow unapproved medical products
or unapproved uses of cleared or approved medical products to be used in an emergency to diagnose, treat or prevent
serious or life-threatening diseases or conditions caused by chemical, biological, radiological or nuclear warfare threat
agents when there are no adequate, approved, and available alternatives.
Under this authority, the FDA may issue an EUA for an unapproved device if the following four statutory
criteria have been met: (1) a serious or life-threatening condition exists; (2) evidence of effectiveness of the device
exists; (3) a risk-benefit analysis shows that the benefits of the product outweigh the risks; and (4) no other alternatives
exist for diagnosing, preventing or treating the disease or condition. Evidence of effectiveness includes medical devices
that “may be effective” to prevent, diagnose, or treat the disease or condition identified in a declaration of emergency
issued by the Secretary of the Department of Health and Human Services (HHS). The “may be effective” standard for
EUAs requires a lower level of evidence than the “effectiveness” standard that FDA uses for product clearances or
approvals in non-emergency situations. The FDA assesses the potential effectiveness of a possible EUA product on a
case-by-case basis using a risk-benefit analysis. In determining whether the known and potential benefits of the product
outweigh the known and potential risks, the FDA examines the totality of the scientific evidence to make an overall risk-
benefit determination. Such evidence, which could arise from a variety of sources, may include (but is not limited
to) results of domestic and foreign clinical trials, in vivo efficacy data from animal models, in vitro data, as well as the
quality and quantity of the available evidence.
Once granted, an EUA will remain in effect and generally terminate on the earlier of (1) the determination by
the Secretary of HHS that the public health emergency has ceased or (2) a change in the approval status of the product
such that the authorized use(s) of the product are no longer unapproved. After the EUA is no longer valid, the product is
no longer considered to be legally marketed and one of the FDA’s non-emergency premarket pathways would be
necessary to resume or continue distribution of the subject product.
The FDA also may revise or revoke an EUA if the circumstances justifying its issuance no longer exist, the
criteria for its issuance are no longer met, or other circumstances make a revision or revocation appropriate to protect the
public health or safety.
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On January 31, 2020, the Secretary of HHS issued a declaration of a public health emergency related to
COVID-19. On February 4, 2020, HHS determined that COVID-19 represents a public health emergency that has a
significant potential to affect national security or the health and security of U.S. citizens living abroad and, subsequently,
declared on March 24, 2020, that circumstances exist to justify the authorization of emergency use of medical devices,
including alternative products used as medical devices, during the COVID-19 pandemic, subject to the terms of any
authorization as issued by the FDA. On February 29, 2020, the FDA issued an immediately in effect guidance with
policy specific to development of IVD tests during the COVID-19 public health emergency. This guidance was updated
on March 16, 2020, May 4, 2020, and May 11, 2020.
Clinical Trials
Clinical trials are usually required to support a PMA and are sometimes required for a 510(k). In the U.S., if the
device is determined to present a “significant risk,” the manufacturer may not begin a clinical trial until it submits an
investigational device exemption application (IDE) and obtains approval of the IDE from the FDA. These clinical trials
are also subject to the review, approval and oversight of an institutional review board (IRB) at each clinical trial site. The
clinical trials must be conducted in accordance with the FDA’s IDE regulations and good clinical practices. A clinical
trial may be suspended by FDA, the sponsor or an IRB at its institution at any time for various reasons, including a belief
that the risks to the study participants outweigh the benefits of participation in the trial. Even if a clinical trial is
completed, the results may not demonstrate the safety and efficacy of a device to the satisfaction of the FDA, or may be
equivocal or otherwise not be sufficient to obtain approval of a device.
Breakthrough Device Designation
FDA Breakthrough Device designation is granted to certain medical devices and device-led combination
products that provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or
conditions. The goal is to give patients and doctors timely access to these medical devices by speeding up their
development, assessment, and review, while preserving the statutory standards for premarket approval. The
Breakthrough Devices Program offers device companies an opportunity to interact with the FDA's experts through
several different program options to efficiently address topics as they arise during the premarket review phase, which
can help companies receive feedback from the FDA and identify areas of agreement in a timely way. Recipients may
also receive prioritized review of their submission and potential Medicare reimbursement through the Medicare
Coverage of Innovative Technology payment pathway. Although Breakthrough Device designation or access to any
other expedited program may expedite the development or clearance/authorization/approval process, it is not guaranteed
to do so, and, more importantly, it does not change the standards for clearance/authorization/approval. Designation for
any expedited review procedure does not ensure that we will ultimately obtain regulatory clearance or approval for such
product.
FDA Enforcement
After a medical device is placed on the market, numerous regulatory requirements apply. These include among
other things:
•
•
•
establishment registration and device listing;
the QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design,
testing, control, documentation and other quality assurance procedures during all aspects of the
manufacturing process;
labeling regulations and the FDA prohibitions against the promotion of products for uncleared, unapproved
or “off-label” uses and other requirements related to promotional activities;
• medical device reporting regulations, which require that manufacturers report to the FDA if their device
may have caused or contributed to a death or serious injury, or if their device malfunctioned and the device
36
or a similar device marketed by the manufacturer would be likely to cause or contribute to a death or
serious injury if the malfunction were to recur;
•
•
corrections and removal reporting regulations, which require that manufacturers report to the FDA field
corrections or removals if undertaken to reduce a risk to health posed by a device or to remedy a violation
of the Federal Food, Drug, and Cosmetics Act that may present a risk to health; and
post market surveillance regulations, which apply to certain Class II or III devices when necessary to
protect the public health or to provide additional safety and effectiveness data for the device.
To ensure compliance with regulatory requirements, medical device manufacturers are subject to market
surveillance and periodic, pre-scheduled and unannounced inspections by the FDA. Failure to comply with applicable
regulatory requirements can result in enforcement action by the FDA, which may include sanctions, including but not
limited to, warning letters; fines, injunctions, consent decrees and civil penalties; recall or seizure of the device;
operating restrictions, partial suspension or total shutdown of production; refusal to grant 510(k) clearance or PMA
approvals of new devices; withdrawal of 510(k) clearance or PMA approvals; and civil or criminal prosecution.
Clinical Laboratory Improvement Amendments of 1988, Regulation of LDTs and State Regulation
Since our acquisition of Aushon in January 2018, we own and operate a CLIA certified laboratory. The Clinical
Laboratory Improvement Amendments of 1988 (CLIA) are federal regulatory standards that apply to all clinical
laboratory testing performed on humans in the United States (with the exception of clinical trials and basic research). A
clinical laboratory is defined by CLIA as any facility that performs laboratory testing on specimens obtained from
humans for the purpose of providing information for health assessment and for the diagnosis, prevention, or treatment of
disease. CLIA requires such laboratories to be certified by the federal government and mandates compliance with
various operational, personnel, facilities administration, quality and proficiency testing requirements intended to ensure
that testing services are accurate, reliable and timely. CLIA certification also is a prerequisite to be eligible to bill state
and federal health care programs, as well as many private insurers, for laboratory testing services.
In addition, CLIA requires certified laboratories to enroll in an approved proficiency testing program if
performing testing in any category for which proficiency testing is required. If a laboratory fails to achieve a passing
score on a proficiency test, then it loses its right to perform testing.
As a condition of CLIA certification, laboratories are subject to survey and inspection every other year, in
addition to being subject to additional random inspections. The biennial survey is conducted by the Centers for
Medicare & Medicaid Services (“CMS”), a CMS agent (typically a state agency), or, a CMS-approved accreditation
organization.
High complexity, CLIA-certified laboratories, such as ours, frequently develop testing procedures to provide
diagnostic results to customers. These tests have been traditionally offered by nearly all complex laboratories for the last
few decades as LDTs, which are subject to CMS oversight through its enforcement of CLIA. The FDA also has claimed
that it has regulatory authority over LDTs, but has not exercised enforcement with respect to most LDTs offered by high
complexity laboratories, and not sought to require these laboratories to comply with FDA regulations regarding medical
devices. During 2010, the FDA publicly announced that it had decided to exercise regulatory authority over these LDTs,
and that it planned to issue guidance to the industry regarding its regulatory approach. At that time, the FDA indicated
that it would use a risk-based approach to regulation and would direct more resources to tests with wider distribution and
with the highest risk of injury, but that it would be sensitive to the need to not adversely impact patient care or
innovation. In September 2014, the FDA announced its framework and timetable for implementing this guidance. On
November 18, 2016, the FDA announced it would not release final guidance at that time and instead would continue to
work with stakeholders, the new administration and Congress to determine the right approach. On January 3, 2017, the
FDA released a discussion paper outlining a possible risk-based approach for FDA and CMS oversight of LDTs. Later in
2017, the FDA indicated that Congress should enact legislation to address improved oversight of diagnostics,
including LTDs, rather than the FDA addressing the issue through administrative proposals. We cannot predict the
ultimate timing or form of any such guidance or regulation or their potential impact. If adopted, such a regulatory
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approach by the FDA may lead to an increased regulatory burden, including additional costs and delays in introducing
new tests. While the ultimate impact of the FDA’s approach is unknown, it may be extensive and may result in
significant change.
In addition, some states require that any laboratory be licensed by the appropriate state agency in the state in
which it operates. Laboratories must also hold state licenses or permits, as applicable, from various states including, but
not limited to, California, Florida, New York, Pennsylvania, Rhode Island and Maryland, to the extent that they accept
specimens from one or more of these states, each of which requires out-of-state laboratories to obtain licensure.
If a laboratory is out of compliance with state laws or regulations governing licensed laboratories or with CLIA,
it may be subject to enforcement actions that may include suspension, limitation or revocation of the license or CLIA
certificate, assessment of financial penalties or fines, or imprisonment. Loss of a laboratory’s CLIA certificate or state
license may also result in the inability to receive payments from state and federal health care programs as well as private
third-party payors.
If, in the future, we perform clinical diagnostic testing, we would also become subject to the Health Insurance
Portability and Accountability Act of 1996 (HIPAA), as well as additional federal and state laws that impose a variety of
fraud and abuse prohibitions on healthcare providers, including clinical laboratories.
Europe/Rest of World Government Regulation
Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory
authorities in non-U.S. countries prior to the commencement of clinical trials or marketing of our product for clinical
diagnostic use in those countries. The regulations in other jurisdictions vary from those in the U.S. and may be easier or
more difficult to satisfy and are subject to change. For example, the European Union (the EU) recently published new
regulations that will result in greater regulation of medical devices and IVDs. This new IVD regulation (new IVD
Regulation) is significantly different from the European directive for In vitro diagnostic products (IVD Directive) that it
replaces in that it will ensure that the new requirements apply uniformly and on the same schedule across the member
states, include a risk-based classification system and increase the requirements for conformity assessment.
The CE registration for Uman’s Nf-L ELISA assay kit was approved in March 2014 under the IVD Directive.
Under the IVD Directive the assay is classified as a general IVD product, class I and required self-certification with no
involvement of a notified body/authority. Under the new IVD Regulation, the requirements increase and involve
assessment by a notified body for class B, C and D products. Uman’s Nf-L ELISA assay kit is classified as class B
product and must fully implement the new IVD Regulation by May 2027. The new requirements include an ISO 13485
certification of the quality system (which Uman received July 2018) and increased technical evidence and follow-up of
performance of the specific product (e.g., clinical evidence and post-market activities). The work to meet the new
technical requirements is on-going. An internal GAP-analysis is to be performed and work to eliminate the GAPs
performed. When completed, the available technical documentation will be assessed by an external consultant. When all
requirements are met, a notified body will be contacted, and the certification initiated.
Other Governmental Regulation
Data Privacy and Security Laws and Regulations
As a business with a global footprint, compliance with evolving regulations and standards in data privacy and
cybersecurity has resulted, and may continue to result, in increased costs, new compliance challenges, and the threat of
increased regulatory enforcement activity. Our business relies on the secure electronic transmission, storage and hosting
of sensitive information, including personal information, protected health information, financial information, intellectual
property and other sensitive information related to our customers and workforce.
For example, in the U.S., the collection, maintenance, protection, use, transmission, disclosure and disposal of
certain personal information and the security of medical devices are regulated at the U.S. federal and state, international
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and industry levels. U.S. federal and state laws protect the confidentiality of certain patient health information, including
patient medical records, and restrict the use and disclosure of patient health information by health care providers. Privacy
and Security Rules under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended, and
the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), govern the use,
disclosure, and security of protected health information by “Covered Entities,” (which are health care providers that
submit electronic claims, health plans, and health care clearinghouses) and by their “Business Associates” (which is
anyone that performs a service on behalf of a Covered Entity involving the use or disclosure of protected health
information and is not a member of the Covered Entity’s workforce). Rules under HIPAA and HITECH include specific
security standards and breach notification requirements. The U.S. Department of Health and Human Services (HHS)
(through the Office of Civil Rights) has direct enforcement authority against Covered Entities and Business Associates
with regard to both the Security and Privacy Rules, including civil and criminal liability. Generally Quanterix is not a
Covered Entity, however, we may operate as a Business Associate to Covered Entities under certain circumstances.
In addition to the regulation of personal health information, a number of states have also adopted laws and
regulations that may affect our privacy and data security practices for other kinds of personally identifiable information,
such as state laws that govern the use, disclosure and protection of sensitive personal information, such as social security
numbers, or that are designed to protect credit card account data. State consumer protection laws may also establish
privacy and security standards for use and management of personally identifiable information, including information
related to consumers and care providers.
Outside the U.S., we are impacted by the privacy and data security requirements at the international, national
and regional level, and on an industry specific basis. Legal requirements in foreign countries relating to the collection,
storage, handling and transfer of personal data and potentially intellectual property continue to evolve with increasingly
strict enforcement regimes. More privacy and security laws and regulations are being adopted, and more are being
enforced, with potential for significant financial penalties. In the E.U., stringent data protection and privacy rules which
substantially impact the use of patient data across the healthcare industry became effective in May 2018. The E.U.
General Data Protection Regulation (GDPR) applies uniformly across the E.U. and includes, among other things, a
requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances and
significant fines for non-compliance. The GDPR also requires companies processing personal data of individuals
residing in the E.U. to comply with E.U. privacy and data protection rules.
Because the laws and regulations continue to expand, differ from jurisdiction to jurisdiction, and are subject to
evolving (and at times inconsistent) governmental interpretation, compliance with these laws and regulations may
require significant additional cost expenditures or changes in products or business that increase competition or reduce
revenue. Noncompliance could result in the imposition of fines, penalties, or orders to stop noncompliant activities.
Environmental Health and Safety Laws
We are subject to laws and regulations related to the protection of the environment, the health and safety of
employees and the handling, transportation and disposal of medical specimens, infectious and hazardous waste and
radioactive materials. For example, the U.S. Occupational Safety and Health Administration (OSHA), has established
extensive requirements relating specifically to workplace safety for healthcare employers in the U.S. This includes
requirements to develop and implement multi-faceted programs to protect workers from exposure to blood-borne
pathogens, including preventing or minimizing any exposure through needle stick injuries. For purposes of
transportation, some biological materials and laboratory supplies are classified as hazardous materials and are subject to
regulation by one or more of the following agencies: the U.S. Department of Transportation, the U.S. Public Health
Service, the United States Postal Service and the International Air Transport Association. We generally use third-party
vendors to dispose of regulated medical waste, hazardous waste and radioactive materials that we may use during our
research.
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Employees and Human Capital
As of December 31, 2021, we had 460 full-time employees, of which 135 work in sales, sales support, field
service, and marketing, 125 work in engineering and research and development, 125 work in manufacturing and
operations and 75 work in general and administration. Of our 460 full-time employees, 407 were located in the United
States and 53 were located in twelve foreign countries. None of our employees are represented by a labor union or
subject to a collective bargaining agreement. We have a unique culture that stresses the impact our work has on the
eradication of human diseases including Alzheimer’s, cancer and COVID-19. We invest in creating a diverse, inclusive
and safe work environment where our employees can deliver their workplace best every day. Historically, we have
experienced a turnover rate that is comparable to industry average.
Our success depends upon our ability to attract and retain highly qualified management and technical
employees. Talent management is critical to our ability to execute our long-term growth strategy, including providing
career growth, on-the-job learning opportunities and competitive compensation. We are committed to an inclusive
culture which values equality, opportunity and respect. In support of our inclusive culture, we sponsor an internal
Diversity, Equity and Inclusion Committee comprised of employees and executives, provide respectful workplace
training to strengthen employee understanding and consciously strive to recruit a diverse talent pool across all levels of
the organization. As of December 31, 2021, approximately 42% of our employees were women and approximately 30%
were non-white. We are focused on the engagement and empowerment of our employees through the demonstration of
our foundational values, which we refer to as AT&T3: Accountability, Trust, Teamwork and Transparency.
Workforce Compensation and Pay Equity
We provide robust compensation and benefits programs to help meet the needs of our employees. We provide
our full-time employees with highly competitive salaries, as well a bonus and/or commission plan, a matching
401(k) Plan, healthcare and insurance benefits, paid time off and family leave. We also provide all of our employees
with targeted equity-based grants with vesting conditions designed to facilitate retention through the opportunity to
benefit financially from our growth and profitability.
Company Culture
We expect all of our employees and contractors to observe the highest levels of business ethics, integrity,
mutual respect, tolerance and inclusivity. Our employee handbook and Corporate Code of Conduct and Ethics set forth
policies reflecting these values and also provide direction for registering complaints in the event of any violation of our
policies. An “open door” policy is maintained at all levels of the organization and any form of retaliation against an
employee is strictly prohibited.
Employee Engagement and Wellness
The success of our business is fundamentally connected to the physical and mental well-being of our people.
Accordingly, we are committed to the health, safety and wellness of our employees and contractors. We provide our
employees with a wide range of benefits, including benefits directed to their health, safety and long-term financial
security. In response to the COVID-19 pandemic, we have implemented significant changes that we determined were in
the best interest of our employees, as well as the communities in which we operate, and which comply with government
regulations. This includes allowing our employees to work remotely as appropriate, while implementing significant
safety measures designed to protect the health of all those working in and entering our facilities.
Corporate Information
We were incorporated under the laws of the State of Delaware in April 2007 under the name “Digital
Genomics, Inc.” In August 2007, we changed our name to “Quanterix Corporation.” Our principal executive offices are
located at 900 Middlesex Turnpike, Billerica, Massachusetts 01821, and our telephone number is (617) 301-9400.
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Information Available on the Internet
Our Internet website address is www.quanterix.com. The information contained on, or that can be accessed
through, our website is not a part of or incorporated by reference in this Annual Report on Form 10-K. We have included
our website address in this Annual Report on Form 10-K solely as an inactive textual reference. We make available free
of charge through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities
Exchange Act of 1934, as amended (Exchange Act). We make these reports available through the “Investors—Financial
Information—SEC Filings” section of our website as soon as reasonably practicable after we electronically file such
reports with, or furnish such reports to, the SEC. We also make available, free of charge on our website, the reports filed
with the SEC by our executive officers, directors and 10% stockholders pursuant to Section 16 under the Exchange Act
as soon as reasonably practicable after copies of those filings are provided to us by those persons. You can also review
our electronically filed reports and other information that we file with the SEC on the SEC’s website at
http://www.sec.gov.
Item 1A. RISK FACTORS
The following risk factors and other information included in this Annual Report on Form 10-K should be
carefully considered. The risks and uncertainties described below are not the only ones we face. Additional risks and
uncertainties not presently known to us or that we presently deem less significant may also impair our business
operations. Please see page ii of this Annual Report on Form 10-K for a discussion of some of the forward-looking
statements that are qualified by these risk factors. If any of the following risks occur, our business, financial condition,
results of operations and future growth prospects could be materially and adversely affected.
Risk Factor Summary
Our business is subject to numerous risks and uncertainties. The following summary highlights some of the
risks you should consider with respect to our business and prospects. This summary is not complete and the risks
summarized below are not the only risks we face. You should review and carefully consider the risks and uncertainties
described in more detail below, which includes a more complete discussion of these risks.
• We have incurred annual losses since we were formed and expect to incur losses in the future. We cannot
be certain that we will achieve or sustain profitability.
• Our quarterly and annual operating results and cash flows have fluctuated in the past and might continue to
fluctuate, causing the value of our common stock to decline substantially.
•
If our products fail to achieve and sustain sufficient market acceptance, our revenue will be adversely
affected.
• Sales of our assay for the neurological biomarker Nf-L and other neurological assays have become
increasingly important to our business, and any significant decrease in sales of such assays could have a
material adverse effect on our business.
• Epidemic diseases, such as COVID-19 and its variants, could negatively affect various aspects of our
business, make it more difficult to meet our obligations to our customers, and result in reduced demand
from our customers, which could have a material adverse effect on our business, financial condition, results
of operations, or cash flows.
• Our long-term results depend upon our ability to improve existing products and introduce and market new
products successfully.
• Undetected errors or defects in our products could harm our reputation, decrease market acceptance of our
products or expose us to product liability claims.
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• We may seek to enter into strategic collaborations and licensing arrangements with third parties, but we
may not be successful in establishing or maintaining such arrangements.
• We expect to generate a substantial portion of our revenue internationally in the future and can become
further subject to various risks relating to our international activities, which could adversely affect our
business, operating results and financial condition.
• We rely on a single contract manufacturer to manufacture and supply our Simoa HD instruments and rely
on a different single contract manufacturer to manufacture and supply our Simoa SR-X. If either of these
manufacturers should fail to perform, or not perform satisfactorily, our ability to supply these instruments
would be negatively and adversely affected.
• We rely on a limited number of suppliers or, in some cases, one supplier, for some of our materials and
components used in our consumable products and our SP-X instrument, and may not be able to find
replacements or immediately transition to alternative suppliers, which could have a material adverse effect
on our business, financial condition, results of operations and reputation.
•
If the FDA determines that our products are medical devices or if we seek to market our products for
clinical diagnostic or health screening use, we will be required to obtain regulatory clearance(s) or
approval(s) and may be required to cease or limit sales of our then marketed products, which could
materially and adversely affect our business, financial condition and results of operations. Any such
regulatory process would be expensive, time-consuming and uncertain both in timing and in outcome.
• We are subject to extensive regulatory requirements in connection with the EUAs that we have received
from the FDA for our COVID-19 antibody and antigen tests. If we fail to comply with these requirements,
or if the FDA otherwise determines that the conditions no longer warrant such authorization, we will be
unable to market these products pursuant to this authorization and our business may be harmed.
•
•
•
If we do not comply with governmental regulations applicable to our CLIA-certified laboratory, we may
not be able to continue our operations.
If we are unable to protect our intellectual property, it may reduce our ability to maintain any technological
or competitive advantage over our competitors and potential competitors, and our business may be harmed.
If we or any of our partners are sued for infringing intellectual property rights of third parties, it would be
costly and time-consuming, and an unfavorable outcome in that litigation could have a material adverse
effect on our business.
• We may not be able to protect our intellectual property rights throughout the world, which could
materially, negatively affect our business.
• Our stock price may fluctuate significantly.
Risks Related to Our Financial Condition
We have incurred annual losses since we were formed and expect to incur losses in the future. We cannot be certain
that we will achieve or sustain profitability.
We incurred net losses of $57.7 million, $31.5 million, and $40.8 million for the years ended December 31,
2021, 2020, and 2019, respectively. As of December 31, 2021, we had an accumulated deficit of $305.5 million. We
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cannot predict if we will achieve sustained profitability in the near future or at all. We expect that our losses will
continue at least through the next 24 months as we plan to continue to invest significant funds toward expansion of our
commercial organization and the development of our technology. In addition, as a public company, we incur significant
legal, accounting, and other expenses that we would not incur as a private company. These expenses make it harder for
us to achieve and sustain future profitability. We may incur significant losses in the future for a number of reasons, many
of which are beyond our control, including the other risks described in this Annual Report on Form 10-K, the market
acceptance of our products, competitive products, future product development and our market penetration and margins.
Our quarterly and annual operating results and cash flows have fluctuated in the past and might continue to
fluctuate, causing the value of our common stock to decline substantially.
Numerous factors, many of which are outside of our control, may cause or contribute to significant fluctuations
in our quarterly and annual operating results. These fluctuations may make financial planning and forecasting difficult.
In addition, these fluctuations may result in unanticipated decreases in our available cash, which could negatively affect
our business and prospects. In addition, one or more of such factors may cause our revenue or operating expenses in one
period to be disproportionately higher or lower relative to the others. As a result, comparing our operating results on a
period-to-period basis might not be meaningful. You should not rely on our past results as indicative of our future
performance. Moreover, our stock price might be based on expectations of future performance that are unrealistic or that
we might not meet and, if our revenue or operating results fall below the expectations of investors or securities analysts,
the price of our common stock could decline substantially.
If we are unable to maintain adequate revenue growth or do not successfully manage such growth, our business and
growth prospects will be harmed.
We have experienced significant revenue growth in a short period of time. We may not achieve similar growth
rates in future periods. Investors should not rely on our operating results for any prior periods as an indication of our
future operating performance. To effectively manage our anticipated future growth, we must continue to maintain and
enhance our financial, accounting, manufacturing, customer support and sales administration systems, processes and
controls. Failure to effectively manage our anticipated growth could lead us to over-invest or under-invest in
development, operational, and administrative infrastructure; result in weaknesses in our infrastructure, systems, or
controls; give rise to operational mistakes, losses, loss of customers, productivity or business opportunities; and result in
loss of employees and reduced productivity of remaining employees.
Our continued growth could require significant capital expenditures and might divert financial resources from
other projects such as the development of new products and services. As we commercialize additional products , we may
need to incorporate new equipment, implement new technology systems, or hire new personnel with different
qualifications. Failure to manage this growth or transition could result in turnaround time delays, higher product costs,
declining product quality, deteriorating customer service, and slower responses to competitive challenges. A failure in
any one of these areas could make it difficult for us to meet market expectations for our products, and could damage our
reputation and the prospects for our business.
If our management is unable to effectively manage our anticipated growth, our expenses may increase more
than expected, our revenue could decline or grow more slowly than expected and we may be unable to implement our
business strategy. In addition, the quality of our products and services may suffer, which could negatively affect our
reputation and harm our ability to retain and attract customers.
Our future capital needs are uncertain and we may need to raise additional funds in the future.
We believe that our existing cash and cash equivalents as of December 31, 2021, together with our cash
generated from commercial sales, will enable us to fund our operating expenses and capital expenditure requirements for
the foreseeable future. However, our future funding requirements will depend on many factors, including:
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continued market acceptance of our products and the ability of our products to meet our customers’
expectations;
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potential opportunities to strategically acquire companies or technologies that may be complementary to
our business;
the cost and timing of establishing additional sales, marketing and distribution capabilities;
the cost of our research and development activities;
our ability to enter into collaborations in the future, and the success of any such collaborations;
the cost and timing of potential regulatory clearances or approvals that may be required in the future for our
products; and
the effect of competing technological and market developments.
We cannot assure you that we will be able to obtain additional funds on acceptable terms, or at all. If we raise
additional funds by issuing equity or equity-linked securities, our stockholders may experience dilution. Future debt
financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any debt
or equity financing may contain terms that are not favorable to us or our stockholders. If we raise additional funds
through collaboration and licensing arrangements with third parties, it may be necessary to relinquish some rights to our
technologies or our products, or grant licenses on terms that are not favorable to us. If we do not have, or are not able to
obtain, sufficient funds, we may have to delay development or commercialization of our products. We also may have to
reduce marketing, customer support or other resources devoted to our products or cease operations. Any of these factors
could have a material adverse effect on our financial condition, operating results and business.
Our ability to use net operating losses to offset future income may be subject to certain limitations.
As of December 31, 2021, we had federal net operating loss (NOLs) carryforwards to offset future taxable
income of approximately $267.2 million, which begin to expire in 2026. A lack of future taxable income would
adversely affect our ability to utilize these NOLs. In addition, under Section 382 of the Internal Revenue Code of 1986,
as amended (the Code), a corporation that undergoes an “ownership change” is subject to limitations on its ability to
utilize its NOLs to offset future taxable income. We have already experienced ownership changes as defined under
Section 382 of the Code. Depending on the timing of any future utilization of our NOLs, we may be limited as to the
amount that can be utilized each year as a result of such previous ownership changes. In addition, future changes in our
stock ownership, including changes that may be outside of our control, could result in additional ownership changes
under Section 382 of the Code. Our NOLs may also be impaired under similar provisions of state law. We have recorded
a full valuation allowance related to our NOLs and other deferred tax assets due to the uncertainty of the ultimate
realization of the future benefits of those assets.
U.S. taxation of international business activities or the adoption of tax reform policies could materially impact our
future financial position and results of operations.
Limitations on the ability of taxpayers to claim and utilize foreign tax credits and the deferral of certain tax
deductions until earnings outside of the United States are repatriated to the United States, as well as changes to U.S. tax
laws that may be enacted in the future, could impact the tax treatment of future foreign earnings. Should the scale of our
international business activities expand, any changes in the U.S. taxation of such activities could increase our worldwide
effective tax rate and harm our future financial position and results of operations.
Risks Related to Our Business
If our products fail to achieve and sustain sufficient market acceptance, our revenue will be adversely affected.
Our success depends on our ability to develop and market products that are recognized and accepted by our
customers and potential customers as reliable, enabling and cost-effective. Continued market acceptance of our Simoa
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technology platform and products will depend on many factors, including our ability to convince potential customers that
our technology is an attractive alternative to other available technologies. Historically, a significant part of our sales and
marketing efforts has been directed at demonstrating the advantages of our technology to industry leaders and
encouraging such leaders to publish or present the results of their evaluation of our system. We also need to demonstrate
to current and prospective customers that our products can help them accomplish their objectives in a cost-effective and
efficient manner. If we are unable to continue to motivate leading researchers to use Simoa technology, or if such
researchers are unable to achieve or unwilling to publish or present significant experimental results using our systems,
acceptance and adoption of our systems may be slowed and our ability to increase our revenue would be adversely
affected.
Our future success is dependent upon our ability to further penetrate our existing customer base and attract new
customers.
Our success will depend upon our ability to respond to the evolving needs of, and increase our market share
among, existing customers and adding new customers. Identifying, engaging and marketing to customers requires
substantial time, expertise and expense and involves a number of risks, including:
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our ability to attract, retain and manage the sales, marketing and service personnel necessary to expand
market acceptance for our Simoa technology platforms;
the time and cost of maintaining and growing a specialized sales, marketing and service force; and
our sales, marketing and service force may be unable to accomplish their goals.
We have utilized third parties to assist with sales, distribution and customer support in certain regions of the
world. When we enter into such arrangements, there is no guarantee that we will be successful in attracting desirable
sales and distribution partners. There is also no guarantee that we will be able to enter into such arrangements on
favorable terms. Any failure of our sales and marketing efforts, or those of any third-party sales and distribution partners,
would adversely affect our business.
Sales of our assay for the neurological biomarker Nf-L and other neurological assays have become increasingly
important to our business, and any significant decrease in sales of such assays could have a material adverse effect
on our business.
Neurology has been one of our primary focus areas for commercialization of our Simoa technology and the
services that we provide to our customers. Sales from neurological-related biomarkers, Nf-L in particular, have become
an increasingly important part of our business. There can be no assurance that we will continue to derive meaningful
revenues from the sale of our neurological products, from services related to neurodegenerative conditions or from sales
of instruments driven by customers desiring access to our technology for work relating to neurological conditions. The
adoption by our customers of competitive technologies for detecting biomarkers of neurodegenerative conditions could
negatively impact our revenues and have a material adverse effect on our business.
Epidemic diseases, such as COVID-19 and its variants, could negatively affect various aspects of our business, make it
more difficult to meet our obligations to our customers, and result in reduced demand from our customers, which could
have a material adverse effect on our business, financial condition, results of operations, or cash flows.
Our business could be adversely affected by the effects of a widespread outbreak of contagious disease, such as
COVID-19 and its variants. Potential impacts to our business include disruptions to or restrictions on our employees’ and
customers’ ability to travel, temporary closures of the facilities of our suppliers or customers, delays in installation of
instruments, and delays in shipments to and from affected countries. Any such travel restrictions and business closures
could adversely impact our operations locally and worldwide, including our ability to manufacture, sell or distribute our
products, as well as cause temporary closures of our foreign distributors, or the facilities of suppliers or customers. Any
material disruption of our employees, distributors, suppliers or customers in impacted countries could impact our global
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sales and operating results. In addition, a significant outbreak of contagious diseases in the human population could result
in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting
in an economic downturn that could affect demand for our products and likely impact our operating results.
The sales cycle for our Simoa instruments can be lengthy and variable, which makes it difficult for us to forecast
revenue and other operating results.
The sales process for our Simoa instruments generally involves numerous interactions with multiple individuals
within an organization, and often includes in-depth analysis by potential customers of our technology and products and a
lengthy review process. Our customers’ evaluation processes often involve a number of factors, many of which are
beyond our control. As a result of these factors, the capital investment required to purchase our systems, and the budget
cycles of our customers, the time from initial contact with a customer to our receipt of a purchase order can vary
significantly. Given the length and uncertainty of our sales cycle, we have in the past experienced, and expect in the
future to experience, fluctuations in our sales on a period-to-period basis. In addition, any failure to meet customer
expectations could result in customers choosing to retain their existing systems, using existing assays not requiring
capital equipment, or purchasing systems other than ours.
Our long-term results depend upon our ability to improve existing products and introduce and market new products
successfully.
We generally sell our products in industries that are characterized by rapid technological changes, frequent new
product introductions and changing industry standards. Accordingly, our business is dependent on the continued
improvement of our existing Simoa products and our development of new products utilizing Simoa or other potential
future technology. As we introduce new products or refine, improve or upgrade versions of existing products, we cannot
predict the level of market acceptance or the amount of market share these products will achieve, if any. We cannot
assure you that we will not experience material delays in the introduction of new products in the future. In addition,
introducing new products could result in a decrease in revenues from our existing products. Consistent with our strategy
of offering new products and product refinements, we expect to continue to use a substantial amount of capital for
product research and development. We may need more capital for product research and development than is available on
terms favorable to us, if at all. If we do not develop new products and product enhancements based on technological
innovation on a timely basis, our products may become obsolete over time and our revenues, cash flow, profitability and
competitive position will suffer.
Undetected errors or defects in our products could harm our reputation, decrease market acceptance of our products
or expose us to product liability claims.
Our Simoa products may contain undetected errors or defects when first introduced or as new versions or new
products are released. Disruptions affecting the introduction or release of, or other performance problems with, our
products may damage our customers’ businesses and could harm their and our reputation. If that occurs, we may incur
significant costs, the attention of our key personnel could be diverted, or other significant customer relations problems
may arise. We may also be subject to warranty and liability claims for damages related to errors or defects in our
products. In addition, if we do not meet industry or quality standards, if applicable, our products may be subject to recall.
A material liability claim, recall or other occurrence that harms our reputation or decreases market acceptance of our
products could harm our business and operating results.
Although we do not, and cannot currently, promote the use of our products, or services based on our products,
for diagnostic purposes, if our customers develop or use them for diagnostic purposes, someone could file a product
liability claim alleging that one of our products contained a design or manufacturing defect that resulted in the failure to
adequately perform, leading to death or injury. A product liability claim could result in substantial damages and be
costly and time-consuming to defend, either of which could materially harm our business or financial condition. We
cannot assure you that our product liability insurance would adequately protect our assets from the financial impact of
defending a product liability claim. Any product liability claim brought against us, with or without merit, could increase
our product liability insurance rates or prevent us from securing insurance coverage in the future.
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We may seek to enter into additional strategic collaborations and licensing arrangements with third parties, but we
may not be successful in establishing or maintaining such arrangements.
We may seek to enter into additional strategic collaborations and licensing agreements with third parties to
develop products based on our Simoa technology, such as for certain in vitro diagnostics, or IVD, purposes. However,
we may not be successful in doing so. Establishing collaborations and licensing arrangements is difficult and
time-consuming, and discussions may not lead to collaborations or licenses on favorable terms, if at all. Even if we
establish such relationships, such as our license agreement with Abbott, if our partners do not prioritize and commit
sufficient resources to develop and sell products based on our Simoa technology, they may never result in the successful
development or commercialization of products based on our Simoa technology.
Our reliance on distributors for sales of our products outside of the United States could limit or prevent us from
selling our products and could impact our revenue.
We have established exclusive distribution agreements for our Simoa instruments and related consumable
products within certain foreign countries, including Australia, Brazil, China, Czech Republic, India, Hong Kong, Israel,
Japan, New Zealand, Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan, and UAE. We intend to
continue to grow our business internationally, and to do so we must attract additional distributors and retain existing
distributors to maximize the commercial opportunity for our products. There is no guarantee that we will be successful in
attracting or retaining desirable sales and distribution partners or that we will be able to enter into such arrangements on
favorable terms. Distributors may not commit the necessary resources to market and sell our products to the level of our
expectations or may choose to favor marketing the products of our competitors. If current or future distributors do not
perform adequately, or we are unable to enter into effective arrangements with distributors in particular geographic
areas, we may not realize long-term international revenue growth. In addition, if our distributors fail to comply with
applicable laws and ethical standards, including anti-bribery laws, this could damage our reputation and could have a
significant adverse effect on our business and our revenues.
We expect to generate a substantial portion of our revenue internationally in the future and can become further
subject to various risks relating to our international activities, which could adversely affect our business, operating
results and financial condition.
For the years ended December 31, 2021, 2020, and 2019, approximately 36%, 31% and 41%, respectively, of
our total revenue was generated from customers located outside of North America. We believe that a
substantial percentage of our future revenue will continue to come from international sources as we expand our overseas
operations and develop opportunities in additional areas. We have limited experience operating internationally and
engaging in international business involves a number of difficulties and risks, including:
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required compliance with existing and changing U.S. or foreign regulatory requirements and laws;
difficulties and costs of staffing and managing foreign operations;
a shortage of high-quality salespeople and distributors;
pricing pressure that we may experience internationally;
difficulties in maintaining consistency with our internal guidelines;
difficulties in enforcing our intellectual property rights and in defending against third-party threats and
intellectual property enforcement actions against us or any of our distributors, suppliers or collaborators;
reduced or varied protection for intellectual property rights in some countries;
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required compliance with anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act, data privacy
requirements, such as the GDPR, labor laws and anti-competition regulations;
export or import restrictions and supply chain disruptions;
laws and business practices favoring local companies;
longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain
foreign legal systems;
the imposition of restrictions on the activities of foreign agents, representatives and distributors;
foreign currency exchange rate fluctuations;
the imposition of U.S. or international sanctions against a country, company, person or entity with whom
we do business that would restrict or prohibit continued business with the sanctioned country, company,
person or entity;
the impact of political and economic instability and conflict, such as the tension in Russia and Ukraine,
which could lead to uncertainty and instability in global financial markets;
scrutiny of foreign tax authorities which could result in significant fines, penalties and additional taxes
being imposed on us;
the imposition of new trade restrictions; and
potentially adverse tax consequences, tariffs, customs charges, bureaucratic requirements and other trade
barriers.
Historically, most of our revenue has been denominated in U.S. dollars. In the future, we may sell our products
and services in local currency outside of the United States. As our operations in countries outside of the United States
grow, our results of operations and cash flows may be subject to fluctuations due to changes in foreign currency
exchange rates, which could harm our business in the future. For example, if the value of the U.S. dollar increases
relative to foreign currencies, in the absence of a corresponding change in local currency prices, our revenue could be
adversely affected as we convert revenue from local currencies to U.S. dollars. If we dedicate significant resources to our
international operations and are unable to manage these risks effectively, our business, operating results and financial
condition will suffer.
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and other worldwide anti-
bribery laws by us or our agents.
We are subject to the U.S. Foreign Corrupt Practices Act (the FCPA), which prohibits companies and their
intermediaries from making payments in violation of law to non-U.S. government officials for the purpose of obtaining
or retaining business or securing any other improper advantage. Our reliance on independent distributors to sell our
products internationally demands a high degree of vigilance in maintaining our policy against participation in corrupt
activity, because these distributors could be deemed to be our agents, and we could be held responsible for their actions.
Other U.S. companies in the medical device and pharmaceutical fields have faced criminal penalties under the FCPA for
allowing their agents to deviate from appropriate practices in doing business with these individuals. We are also subject
to similar antibribery laws in the jurisdictions in which we operate, including the United Kingdom’s Bribery Act of
2010, which also prohibits commercial bribery and makes it a crime for companies to fail to prevent bribery. We have
limited experience in complying with these laws and in developing procedures to monitor compliance with these laws by
our agents. These laws are complex and far-reaching in nature, and, as a result, we cannot assure you that we would not
be required in the future to alter one or more of our practices to be in compliance with these laws or any changes in these
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laws or the interpretation thereof. Any violations of these laws, or allegations of such violations, could disrupt our
operations, involve significant management distraction, involve significant costs and expenses, including legal fees, and
could result in a material adverse effect on our business, prospects, financial condition, or results of operations. We
could also incur severe penalties, including criminal and civil penalties, disgorgement, and other remedial measures.
We rely on a single contract manufacturer to manufacture and supply our Simoa HD-X instrument and rely on a
different single contract manufacturer to manufacture and supply our Simoa SR-X instrument. If either of these
manufacturers should fail or not perform satisfactorily, our ability to supply these instruments would be negatively
and adversely affected.
We currently rely on a single contract manufacturer, STRATEC, an analytical and diagnostic systems
manufacturer located in Germany, to manufacture and supply all of our Simoa HD-X instruments. In addition, we
currently rely on a single contract manufacturer, Paramit, a contract manufacturer located in California, to manufacture
and supply all of our SR-X instruments. Since our contract with STRATEC does not commit them to supply quantities
beyond the amounts included in our forecasts and our contract with Paramit does not commit them to carry inventory or
make available any particular quantities, these contract manufacturers may give other customers’ needs higher priority
than ours, and we may not be able to obtain adequate supplies in a timely manner or on commercially reasonable terms.
If either of these manufacturers were not able to supply instruments, our business would be harmed.
In the event it becomes necessary to utilize a different contract manufacturer for the HD-X instrument or the
SR-X, we would experience additional costs, delays and difficulties in doing so as a result of identifying and entering
into an agreement with a new supplier as well as preparing such new supplier to meet the logistical requirements
associated with manufacturing our units, and our business would suffer. We may also experience additional costs and
delays in the event we need access to or rights under any intellectual property of STRATEC.
In addition, certain of the components used in our instruments are sourced by these manufacturers from limited
or sole suppliers. If they were to lose such suppliers, there can be no assurance that they would be able to identify or
enter into agreements with alternative suppliers on a timely basis on acceptable terms, if at all. An interruption in our
ability to sell and deliver instruments to customers could occur if our manufacturers encounter delays or difficulties in
securing these components, or if the quality of the components supplied do not meet specifications, or if they cannot then
obtain an acceptable substitute. If any of these events occur, our business and operating results could be harmed.
We rely on a limited number of suppliers or, in some cases, one supplier, for some of our materials and components
used in our consumable products and our SP-X instrument, and may not be able to find replacements or immediately
transition to alternative suppliers, which could have a material adverse effect on our business, financial condition,
results of operations and reputation.
We rely on limited or sole suppliers for certain reagents and other materials and components that are used in our
consumable products and in our SP-X instrument. While we have long-term contracts with some critical suppliers, we do
not have contracts with all suppliers and instead rely on periodically forecasting our needs for such materials and
entering into standard purchase orders with them. In addition, our use of many of the materials used in our consumable
products is limited to research use only. As we expand into diagnostic applications for our products, we will need to
secure diagnostic rights to such materials. If we were to lose suppliers or were unable to secure required rights for
materials from suppliers, there can be no assurance that we will be able to identify or enter into agreements with
alternative suppliers on a timely basis and on acceptable terms, if at all. An interruption in our operations could occur if
we encounter delays or difficulties in securing these materials or any required rights to these materials, if the quality of
the materials supplied do not meet our requirements, or if we cannot then obtain an acceptable substitute. The time and
effort required to qualify a new supplier and ensure that the new materials provide the same or better quality results
could result in significant additional costs. Any such interruption could significantly affect our business, financial
condition, results of operations and reputation.
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Increased demand may cause us to experience delays in production or backlogs in deliveries that could limit the
growth of our revenue or increase our losses.
A significant unforecasted increase in demand for our products may result in delays or shortfalls in our
production and backlogs in deliveries. If we are unable to keep up with demand for our products, our revenue could be
impaired, market acceptance for our products could be adversely affected and our customers might instead purchase our
competitors’ products. Our inability to successfully manufacture our products would have a material adverse effect on
our operating results.
The life sciences research and diagnostic markets are highly competitive. If we fail to effectively compete, our
business, financial condition and operating results will suffer.
We face significant competition in the life sciences research and diagnostic markets. We currently compete with
both established and early-stage companies that design, manufacture and market systems and consumable supplies.
Many of our current competitors have competitive advantages over us, including:
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greater name and brand recognition;
substantially greater financial and human resources;
broader product lines;
larger sales forces and more established distributor networks;
substantial intellectual property portfolios;
larger and more established customer bases and relationships; and
better established, larger scale, and lower cost manufacturing capabilities.
We cannot assure you that our products will compete favorably or that we will be successful in the face of
increasing competition from new products and technologies introduced by our existing competitors or new companies
entering our markets. In addition, we cannot assure you that our competitors do not have or will not develop products or
technologies that currently or in the future will enable them to produce competitive products with greater capabilities or
at lower costs than ours. Any failure to compete effectively could materially and adversely affect our business, financial
condition and operating results.
Integrating any business, product or technology we acquire can be expensive and time-consuming and can disrupt
and adversely affect our ongoing business, including product sales, and distract our management.
We may acquire other businesses, products or technologies as well as pursue strategic alliances, joint ventures,
technology licenses or investments in complementary businesses, such as our 2018 acquisition of Aushon and our 2019
acquisition of Uman. Our ability to successfully integrate any business, product or technology we acquire depends on a
number of factors, including, but not limited to, our ability to:
• minimize the disruption and distraction of our management and other employees, including our sales force,
in connection with the integration of any acquired business, product or technology;
• minimize disruption in relationships with customers, distributors or suppliers as a result of such a
transaction;
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avoid acquisition of unanticipated liabilities related to acquired companies;
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• maintain and increase sales of our existing products;
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establish or manage the transition of the manufacture and supply of any acquired product;
identify and add the necessary sales, marketing, manufacturing, regulatory and other related personnel,
capabilities and infrastructure that are required to successfully integrate any acquired business, product or
technology;
• manage the transition and migration of acquired personnel and all commercial, financial, legal, regulatory
and other pertinent information relating to any acquired business, product or technology;
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comply with legal, regulatory and contractual requirements applicable to any acquired business, product or
technology; and
• maintain and extend intellectual property protection for any acquired product or technology.
If we are unable to perform the above functions or otherwise effectively integrate any acquired businesses,
products or technologies, our business, financial condition and operating results will suffer.
Foreign acquisitions (such as our acquisition of Uman) involve unique risks in addition to those mentioned
above, including those related to integration of operations across different cultures and languages, currency risks and the
particular economic, political and regulatory risks associated with specific countries.
Also, the anticipated benefit of any acquisition may not materialize. Future acquisitions or dispositions could
result in potentially dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities or
amortization expenses or write-offs of goodwill, any of which could harm our financial condition. We cannot predict the
number, timing or size of future joint ventures or acquisitions, or the effect that any such transactions might have on our
operating results.
Risks Related to Government Regulation and Diagnostic Product Reimbursement
If the FDA determines that our products are medical devices or if we seek to market our products for clinical
diagnostic or health screening use, we will be required to obtain regulatory clearance(s) or approval(s) and may be
required to cease or limit sales of our then marketed products, which could materially and adversely affect our
business, financial condition and results of operations. Any such regulatory process would be expensive,
time-consuming and uncertain both in timing and in outcome.
We have focused initially on the life sciences research market. This includes offering products for use by
laboratories associated with academic and governmental research institutions, as well as pharmaceutical, biotechnology
and contract research companies. Accordingly, other than our COVID assays for which we have received EUAs, our
products are labeled as “Research Use Only” and are not intended for diagnostic uses. While we have focused initially
on the life sciences research market and RUO products only, our future strategy includes expanding our product line to
encompass products that are intended to be used for the diagnosis of disease, either alone or in collaboration with third
parties. Such IVD products, once developed and offered, will be subject to regulation by the FDA, or comparable
international agencies, as medical devices including requirements for regulatory clearance or approval of such products
before they can be marketed.
The process of obtaining regulatory clearances to market a medical device can be costly and time consuming,
and we or our collaborators may not be able to obtain these clearances or approvals on a timely basis, if at all. In general,
the FDA permits commercial distribution of a new medical device only after the device has received clearance under
Section 510(k) of the Federal Food, Drug and Cosmetic Act, or is the subject of an approved PMA, unless the device is
specifically exempt from those requirements. The FDA will clear marketing of a lower risk medical device through the
510(k) process if the manufacturer demonstrates that the new product is substantially equivalent to other
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pre-amendment, 510(k)-exempt, 510(k) cleared products, or PMA-approved products that have subsequently been
down-classified. If the FDA determines that the device is not “substantially equivalent” to a predicate device, or if the
device is automatically classified into Class III, the device sponsor must then fulfill the much more rigorous
premarketing requirements of the PMA approval process, or seek reclassification of the device through the de novo
process. Pursuant to amendments to the statute in 2012, a manufacturer can also submit a petition for a direct de novo
review if the manufacturer is unable to identify an appropriate predicate device and the new device or new use of the
device presents a moderate or low risk.
High risk devices deemed to pose the greatest risk, such as life-sustaining, life-supporting, or implantable
devices, or devices not deemed substantially equivalent to a previously cleared device, require the approval of a PMA.
The PMA process is more costly, lengthy and uncertain than the 510(k) clearance process. A PMA application must be
supported by extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling
data, to demonstrate to the FDA’s satisfaction the safety and efficacy of the device for its intended use.
Foreign governmental authorities that regulate the manufacture and sale of medical devices have become
increasingly stringent and, to the extent we market and sell our products internationally for such uses, we may be subject
to rigorous international regulation in the future. In these circumstances, we may rely significantly on our foreign
independent distributors or collaborators to comply with the varying regulations, and any failures on their part could
result in restrictions on the sale of our products in foreign countries.
If we or our collaborators are required to obtain a PMA or 510(k) clearance for products based on our
technology, we or they would be subject to a substantial number of additional requirements for medical devices,
including establishment registration, device listing, Quality Systems Regulations (QSRs), which cover the design,
testing, production, control, quality assurance, labeling, packaging, servicing, sterilization (if required), and storage and
shipping of medical devices (among other activities), product labeling, advertising, recordkeeping, post-market
surveillance, post-approval studies, adverse event reporting, and correction and removal (recall) regulations. One or
more of the products we or a collaborator may develop using our technology may also require clinical trials in order to
generate the data required for a PMA. Complying with these requirements may be time-consuming and expensive. We or
our collaborators may be required to expend significant resources to ensure ongoing compliance with the FDA
regulations and/or take satisfactory corrective action in response to enforcement action, which may have a material
adverse effect on the ability to design, develop, and commercialize products using our technology as planned. Failure to
comply with these requirements may subject us or a collaborator to a range of enforcement actions, such as warning
letters, injunctions, civil monetary penalties, criminal prosecution, recall and/or seizure of products, and revocation of
marketing authorization, as well as significant adverse publicity. If we or our collaborators fail to obtain, or experience
significant delays in obtaining, regulatory approvals for IVD products, such products may not be able to be launched or
successfully commercialized in a timely manner, or at all.
LDTs are a subset of IVD tests that are designed, manufactured and offered as services by high complexity
clinical laboratories and used within a single laboratory. The FDA maintains that LDTs are medical devices and has for
the most part exercised enforcement discretion for most LDTs. A significant change in the way that the FDA regulates
any LDTs that we, our collaborators or our customers develop using our technology could affect our business. The FDA
has considered the appropriate way to regulate such tests, but after publishing several draft guidances and holding a
number of public hearings and workshops, no final guidance has been issued. However, if the FDA requires laboratories
to undergo premarket review and comply with other applicable FDA requirements in the future, the cost and time
required to commercialize an LDT will increase substantially, and may reduce the financial incentive for laboratories to
develop LDTs, which could reduce demand for our instruments and our other products.
Foreign jurisdictions have laws and regulations similar to those described above, which may adversely affect
our ability to market our products as planned in such countries. The number and scope of these requirements are
increasing. As in the United States, the cost and time required to comply with regulatory requirements may be
substantial, and there is no guarantee that we will obtain the necessary authorization(s) required to make our products
commercially viable. As a result, the imposition of foreign requirements may also have a material adverse effect on the
commercial viability of our operations.
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We are subject to extensive regulatory requirements in connection with the EUAs that we have received from the
FDA for our COVID-19 antibody and antigen tests. If we fail to comply with these requirements, or if the FDA
otherwise determines that the conditions no longer warrant such authorization, we will be unable to market these
products pursuant to this authorization and our business may be harmed.
We have received EUAs from the FDA authorizing us to market our Simoa Semi-Quantitative SARS-CoV-2
IgG Antibody Test and our Simoa SARS-CoV-2 N Protein Antigen Test, each of which is run on our HD-X instrument.
These EUAs allow us to market and sell these products without the need to obtain premarket clearance or approval under
the FDA’s standard review pathways for the duration of the COVID-19 public health emergency. The FDA has also
established certain conditions which must be met in order to maintain authorization under these EUAs. The requirements
can be unclear and are subject to change.
The FDA has the authority to issue an EUA during a public health emergency if it determines, based on the
totality of the scientific evidence, that it is reasonable to believe that the product may be effective, that the known and
potential benefits of a product outweigh the known and potential risks, that there is no adequate, approved and available
alternative, and if certain other regulatory criteria are met. These standards for marketing authorization are lower than if
the FDA had reviewed these tests under its traditional marketing authorization pathways, and we cannot assure you that
our tests would be cleared or approved under those more extensive clearance and approval standards. Moreover, the
FDA’s policies regarding EUAs can change unexpectedly, and the FDA may revoke an EUA when it determines that the
underlying health emergency no longer exists or warrants such authorization or if problems are identified with the
authorized product. We cannot predict how long our authorizations will remain in place. FDA policies regarding
diagnostic tests, therapies and other products used to diagnose, treat or mitigate COVID-19 remain in flux as the FDA
responds to new and evolving public health information and clinical evidence. Changes to FDA regulations or
requirements could require changes to our authorized tests, necessitate additional measures or make it impractical or
impossible for us to market our tests at all.
In addition, even though we have received these EUAs, these tests may not gain broad market acceptance
among customers, including physicians, healthcare payors, users and others in the medical community. The commercial
success of our COVID-19 tests will initially be dependent upon physicians and healthcare providers adopting our test
kits, which will be informed, in part, by the convenience and accuracy of our tests. Furthermore, the COVID-19
diagnostic testing market is susceptible to rapid technological developments and we may not be able to match new
technological advances, which might render our COVID-19 test kits uncompetitive or obsolete. If we are unable to
match technological improvements in competitive products or effectively respond to the needs of our customers and
users, the demand for our COVID-19 test kits could be reduced.
The termination of the emergency conditions under which EUAs are permitted, the rescission of an EUA, the
failure of our tests to gain market acceptance or our inability to match advances in competing products could adversely
impact our business.
Our products may in the future be subject to product recalls that could harm our reputation, business and financial
results.
The FDA and similar foreign governmental authorities have the authority to require the recall of
commercialized products, including RUO products, in the event of material deficiencies or defects in design or
manufacture. In the case of the FDA, the authority to require a recall must be based on an FDA finding that there is a
reasonable probability that the device would cause serious injury or death. Manufacturers may, under their own
initiative, recall a product if any material deficiency in a device is found. A government-mandated or voluntary recall by
us or one of our distributors could occur as a result of component failures, manufacturing errors, design or labeling
defects or other deficiencies and issues. Recalls of any of our products would divert managerial and financial resources
and have an adverse effect on our financial condition and results of operations. The FDA requires that certain
classifications of recalls be reported to FDA within 10 working days after the recall is initiated. Companies are required
to maintain certain records of recalls, even if they are not reportable to the FDA. We may initiate voluntary recalls
involving our products in the future that we determine do not require notification of the FDA. If the FDA disagrees with
our determinations, they could require us to report those actions as recalls. A future recall announcement could harm our
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reputation with customers and negatively affect our sales. In addition, the FDA could take enforcement action for failing
to report the recalls when they were conducted.
U.S. legislative, FDA or global regulatory reforms may make it more difficult and costly for us to obtain any required
regulatory approval of our product candidates and to manufacture, market and distribute our products after approval
is obtained.
From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory
provisions governing the regulatory approval, manufacture and marketing of regulated products or the reimbursement
thereof. Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or
lengthen review times of future products. In addition, FDA regulations and guidance are often revised or reinterpreted by
the agency in ways that may significantly affect our business and our products. It is impossible to predict whether
legislative changes will be enacted or FDA regulations, guidance or interpretations changed, and what the impact of such
changes, if any, may be.
Moreover, leadership, personnel and structural changes within the FDA as well as recent and future federal
election outcomes could result in significant legislative and regulatory reforms impacting the FDA’s regulation of our
products. Any change in the laws or regulations that govern the clearance and approval processes relating to our current
and future products could make it more difficult and costly to obtain clearance or approval for new products, or to
produce, market and distribute existing products. Significant delays in receiving clearance or approval, or the failure to
receive clearance or approval for our new products would have an adverse effect on our ability to expand our business.
In addition, the EU recently published new regulations that will result in greater regulation of medical devices
and IVDs. The new IVD regulation (new IVD Regulation) is significantly different from the European directive for In
vitro diagnostic products (IVD Directive) that it replaces in that it will ensure that the new requirements apply uniformly
and on the same schedule across the member states, include a risk-based classification system and increase the
requirements for conformity assessment. The CE registration for Uman’s Nf-L ELISA assay kit for CSF was approved
in March 2014 under the IVD Directive. Under the IVD Directive the assay is classified as a general IVD product, class I
and required self-certification with no involvement of a notified body/authority. Under the new IVD Regulation, the
requirements increase and involve assessment by a notified body for class B, C and D products. Uman’s Nf-L ELISA
assay kit for CSF is classified as class B product and must fully implement the new IVD Regulation by May 2027. The
new requirements include an ISO 13485 certification of the quality system (which Uman received July 2018) and
increased technical evidence and follow-up of performance of the specific product (e.g. clinical evidence and post-
market activities). The work to meet the new technical requirements is on-going. An internal GAP-analysis is to be
performed and work to eliminate the GAPs performed.
In order to continue to sell our products in Europe, we must maintain our CE marks and continue to comply
with certain EU directives and, in the future with the new IVD Regulation. Our failure to continue to comply with
applicable foreign regulatory requirements, including those administered by authorities of the EEA countries, could
result in enforcement actions against us, including refusal, suspension or withdrawal of our CE Certificates of
Conformity by our notified body, which could impair our ability to market products in the EEA in the future. Any
changes to the membership of the European Union, such as the departure of the United Kingdom (Brexit), may impact
the regulatory requirements for the impacted countries and impair our business operations and our ability to market
products in such countries.
If we do not comply with governmental regulations applicable to our CLIA-certified laboratory, we may not be able to
continue our operations.
The operation of our Clinical Laboratory Improvement Amendments (CLIA) certified laboratory is subject to
regulation by numerous federal, state and local governmental authorities in the United States. This laboratory holds a
CLIA certificate of compliance and is licensed by the Commonwealth of Massachusetts and the State of Maryland, and
we may obtain other state licenses if required in the future. Failure to comply with federal or state regulations or changes
in those regulatory requirements could result in a substantial curtailment or even prohibition of the operations of our
laboratory and could have an adverse effect on our business. CLIA is a federal law that regulates clinical laboratories
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that perform testing on human specimens for the purpose of providing information for the diagnosis, prevention or
treatment of disease. To maintain CLIA certification, laboratories are subject to survey and inspection every two years.
Moreover, CLIA inspectors may make unannounced inspections of these laboratories. If we were to lose our CLIA
certification or any required state licenses, whether as a result of a revocation, suspension or limitation, it could have a
material adverse effect on our business.
We expect to rely on third parties in conducting any required future studies of diagnostic products that may be
required by the FDA or other regulatory authorities, and those third parties may not perform satisfactorily.
We do not have the ability to independently conduct clinical trials or other studies that may be required to
obtain FDA and other regulatory clearance or approval for future diagnostic products. Accordingly, we expect that we
would rely on third parties, such as clinical investigators, consultants, and collaborators to conduct such studies if
needed. Our reliance on these third parties for clinical and other development activities would reduce our control over
these activities. If these third parties do not successfully carry out their contractual duties or regulatory obligations or
meet expected deadlines, if the third parties need to be replaced or if the quality or accuracy of the data they obtain is
compromised, we may not be able to obtain regulatory clearance or approval.
If diagnostic procedures that are enabled by our technology are subject to unfavorable pricing regulations or
third-party coverage and reimbursement policies, our business could be harmed.
The ability of us, our customers or our collaborators to commercialize diagnostic tests based on our technology
will depend in part on the extent to which coverage and reimbursement for these tests will be available from government
health programs, private health insurers and other third-party payors. In the United States, the principal decisions about
reimbursement for new technologies are often made by the Centers for Medicare and Medicaid Services (CMS). Private
payors often follow CMS to a substantial degree. It is difficult to predict what CMS will decide with respect to
reimbursement. A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government
authorities and third-party payors have attempted to control costs by limiting coverage and the amount of payments for
particular products and procedures. We cannot be sure that coverage will be available for any diagnostic tests based on
our technology, and, if coverage is available, the level of payments. Reimbursement may impact the demand for those
tests. If reimbursement is not available or is available only to limited levels, any tests for which marketing authorization
is received may not be able to be successfully commercialized.
Current and future legislation may increase the difficulty and cost to obtain marketing approval of and
commercialize any products based on our technology and affect the prices that may be obtained.
In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education
Affordability Reconciliation Act, collectively, the ACA, became law. The ACA is a sweeping law intended to broaden
access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and
abuse, add new transparency requirements for the healthcare and health insurance industries, impose new taxes and fees
on the health industry and impose additional health policy reforms. Since its enactment, there have been judicial and
Congressional challenges to certain aspects of the ACA. Both Congress and former President Trump expressed their
intention to repeal or repeal and replace the ACA, and as a result certain sections of the ACA have not been fully
implemented or were effectively repealed. The uncertainty around the future of the ACA, and in particular the impact to
reimbursement levels and the number of insured individuals, may lead to uncertainty or delay in the purchasing
decisions of our customers, which may in turn negatively impact our product sales. If there are not adequate
reimbursement levels, our business and results of operations could be adversely affected.
In addition, other legislative changes have been proposed and adopted since the ACA was enacted. We expect
that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous
coverage criteria and in additional downward pressure on the price that we or our collaborators will receive for any
cleared or approved product. Any reduction in payments from Medicare or other government programs may result in a
similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare
reforms may prevent us from being able to generate revenue, attain profitability, or commercialize any of our products
for which we receive marketing approval.
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In addition, sales of our tests outside of the United States will subject us to foreign regulatory requirements,
which may also change over time.
We cannot predict whether future healthcare initiatives will be implemented at the federal or state level or in
countries outside of the United States in which we may do business, or the effect any future legislation or regulation will
have on us. The expansion in government’s effect on the United States healthcare industry may result in decreased
profits to us, lower reimbursements by payors for our products or reduced medical procedure volumes, all of which may
adversely affect our business, financial condition and results of operations.
Risks Related to Our Operations
We depend on our information technology systems, and any failure of these systems could harm our business.
We depend on information technology and telecommunications systems to operate our business. We have
installed, and expect to expand, a number of enterprise software systems that affect a broad range of business processes
and functional areas, including, for example, systems handling human resources, accounting, manufacturing, inventory
control, financial controls and reporting, sales administration, and other infrastructure operations. In addition to the
aforementioned business systems, we intend to extend the capabilities of both our preventative and detective security
controls by augmenting the monitoring and alerting functions, network design, and automatic countermeasure operations
of our technical systems. These information technology and telecommunications systems support a variety of functions,
including manufacturing operations, quality control, customer service support, and general administrative activities.
Information technology and telecommunications systems are vulnerable to damage from a variety of sources,
including telecommunications or network failures, malicious human acts and natural disasters. Moreover, despite
network security and back-up measures, some of our servers are potentially vulnerable to physical or electronic
break-ins, computer viruses, and similar disruptive problems. Despite the precautionary measures we have taken to
prevent unanticipated problems that could affect our information technology and telecommunications systems, failures
or significant downtime of our information technology or telecommunications systems or those used by our third-party
suppliers could prevent us from operating our business and managing the administrative aspects of our business. Any
disruption or loss of information technology or telecommunications systems on which critical aspects of our operations
depend could have an adverse effect on our business.
Security breaches, loss of data and other disruptions could compromise sensitive information related to our business
or prevent us from accessing critical information and expose us to liability, which could adversely affect our business
and our reputation.
In the ordinary course of our business, we collect and store sensitive data, and intellectual property and
proprietary business information owned or controlled by ourselves or our customers. This data encompasses a wide
variety of business-critical information including research and development information, commercial information, and
business and financial information. We face four primary risks relative to protecting this critical information: loss of
access; inappropriate disclosure; inappropriate modification; and inadequate monitoring of our controls over the first
three risks.
The secure processing, storage, maintenance, and transmission of this critical information is vital to our
operations and business strategy, and we devote significant resources to protecting such information. Although we take
measures to protect sensitive information from unauthorized access or disclosure, our information technology and
infrastructure may be vulnerable to attacks by hackers or viruses, breaches, interruptions due to employee error,
malfeasance, faulty password management, lapses in compliance with privacy and security mandates, or other
disruptions. Any such breach or interruption could compromise our networks and the information stored there could be
accessed by unauthorized parties, publicly disclosed, lost, or stolen. Third parties may attempt to fraudulently induce
employees or other persons into disclosing usernames, passwords or other sensitive information, which may in turn be
used to access our information systems, commit identity theft or carry out other unauthorized or illegal activities. Any
such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost
or stolen. We engage third-party vendors and service providers to store and otherwise process some of our data,
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including sensitive and personal information. Our vendors and service providers may also be the targets of the risks
described above, including cyberattacks, malicious software, phishing schemes, and fraud. Our ability to monitor our
vendors and service providers’ data security is limited, and, in any event, third parties may be able to circumvent those
security measures, resulting in the unauthorized access to, misuse, disclosure, loss or destruction of our data, including
sensitive and personal information, and disruption of our or third-party service providers’ systems. We and our third-
party service providers may face difficulties in identifying, or promptly responding to, potential security breaches and
other instances of unauthorized access to, or disclosure or other loss of, information. Any hacking or other attack on our
or our third-party service providers’ or vendors’ systems, and any unauthorized access to, or disclosure or other loss of,
information suffered by us or our third-party service providers or vendors, or the perception that any of these have
occurred, could result in legal claims or proceedings, loss of intellectual property, liability under laws that protect the
privacy of personal information, negative publicity, disruption of our operations and damage to our reputation, which
could divert our management’s attention from the operation of our business and materially and adversely affect our
business, revenues and competitive position. Moreover, we may need to increase our efforts to train our personnel to
detect and defend against cyber- or phishing-attacks, which are becoming more sophisticated and frequent, and we may
need to implement additional protective measures to reduce the risk of potential security breaches, which could cause us
to incur significant additional expenses.
Any such security breach or interruption, as well as any action by us or our employees or contractors that might
be inconsistent with the rapidly evolving data privacy and security laws and regulations applicable within the United
States and elsewhere where we conduct business, could result in enforcement actions by U.S. states, the U.S. federal
government or foreign governments, liability or sanctions under data privacy laws that protect personally identifiable
information, regulatory penalties, other legal proceedings such as but not limited to private litigation, the incurrence of
significant remediation costs, disruptions to our development programs, business operations and collaborations,
diversion of management efforts and damage to our reputation, which could harm our business and operations. Because
of the rapidly moving nature of technology and the increasing sophistication of cybersecurity threats, our measures to
prevent, respond to and minimize such risks may be unsuccessful.
In addition, our insurance may be insufficient to cover our losses resulting from cyber-attacks, breaches, or
other interruptions, and any incidents may result in loss of, or increased costs of, such insurance. The successful
assertion of one or more large claims against us that exceed available insurance coverage, the occurrence of changes in
our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements,
or denials of coverage, could have a material adverse effect on our business, including our financial condition, results of
operations and reputation.
The failure to maintain our current enterprise resource planning system (ERP) could adversely impact our business
and results of operations.
If our ERP system does not continue to operate as intended, the effectiveness of our internal controls over
financial reporting could be adversely affected or our ability to assess those controls adequately could be delayed.
Significant delays in documenting, reviewing, and testing our internal control could cause us to fail to comply with our
SEC reporting obligations related to our management's assessment of our internal control over financial reporting.
We are currently subject to, and may in the future become subject to additional, U.S. federal and state laws and
regulations imposing obligations on how we collect, store and process personal information. Our actual or perceived
failure to comply with such obligations could harm our business. Ensuring compliance with such laws could also
impair our efforts to maintain and expand our future customer base, and thereby decrease our revenue.
In the ordinary course of our business, we currently, and in the future will, collect, store, transfer, use or process
sensitive data, including personally identifiable information of employees, and intellectual property and proprietary
business information owned or controlled by ourselves and other parties. The secure processing, storage, maintenance,
and transmission of this critical information are vital to our operations and business strategy. We are, and may
increasingly become, subject to various laws and regulations, as well as contractual obligations, relating to data privacy
and security in the jurisdictions in which we operate. The regulatory environment related to data privacy and security is
increasingly rigorous, with new and constantly changing requirements applicable to our business, and enforcement
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practices are likely to remain uncertain for the foreseeable future. These laws and regulations may be interpreted and
applied differently over time and from jurisdiction to jurisdiction, and it is possible that they will be interpreted and
applied in ways that may have a material adverse effect on our business, financial condition, results of operations and
prospects.
In the United States, various federal and state regulators, including governmental agencies like the Federal
Trade Commission, have adopted, or are considering adopting, laws and regulations concerning personal information
and data security. Certain state laws may be more stringent or broader in scope, or offer greater individual rights, with
respect to personal information than federal, international or other state laws, and such laws may differ from each other,
all of which may complicate compliance efforts. For example, the California Consumer Privacy Act (CCPA), which
increases privacy rights for California residents and imposes obligations on companies that process their personal
information, came into effect on January 1, 2020. Among other things, the CCPA requires covered companies to provide
new disclosures to California consumers and provide such consumers new data protection and privacy rights, including
the ability to opt-out of certain sales of personal information. The CCPA provides for civil penalties for violations, as
well as a private right of action for certain data breaches that result in the loss of personal information. This private right
of action may increase the likelihood of, and risks associated with, data breach litigation. In November 2020, California
also passed the California Privacy Rights Act, or CPRA, which significantly expands the CCPA, including by
introducing additional obligations such as data minimization and storage limitations and granting additional rights to
consumers. In 2021, Virginia and Colorado both passed comprehensive state data privacy laws. In addition, laws in all
50 U.S. states require businesses to provide notice to consumers whose personal information has been disclosed as a
result of a data breach. State laws are changing rapidly and there is discussion in the U.S. Congress of a new
comprehensive federal data privacy law to which we would become subject if it is enacted. These and future laws and
regulations may increase our compliance costs and potential liability.
Furthermore, regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of
1996 (HIPAA), establish privacy and security standards that limit the use and disclosure of individually identifiable
health information (known as “protected health information”) and require the implementation of administrative, physical
and technological safeguards to protect the privacy of protected health information and ensure the confidentiality,
integrity and availability of electronic protected health information. Determining whether protected health information
has been handled in compliance with applicable privacy standards and our contractual obligations can require complex
factual and statistical analyses and may be subject to changing interpretation. Although we take measures to protect
sensitive data from unauthorized access, use or disclosure, our information technology and infrastructure may be
vulnerable to attacks by hackers or viruses or breached due to employee error, malfeasance or other malicious or
inadvertent disruptions. Any such breach or interruption could compromise our networks and the information stored
there could be accessed by unauthorized parties, manipulated, publicly disclosed, lost or stolen. Any such access, breach
or other loss of information could result in legal claims or proceedings, and liability under federal or state laws that
protect the privacy of personal information, such as the HIPAA, the Health Information Technology for Economic and
Clinical Health Act (HITECH), and regulatory penalties. Notice of breaches must be made to affected individuals, the
Secretary of the Department of Health and Human Services, and for extensive breaches, notice may need to be made to
the media or State Attorneys General. Such a notice could harm our reputation and our ability to compete.
In addition, the European Parliament and the Council of the European Union adopted the GDPR in 2016 to
replace the current European Union Data Protection Directive and related country-specific legislation. The GDPR took
effect in May 2018 and governs the collection and use of personal data in the European Union. The GDPR, which is
wide-ranging in scope, imposes several requirements relating to the consent of the individuals to whom the personal data
relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach
notification and the use of third-party processors in connection with the processing of the personal data. The GDPR also
imposes strict rules on the transfer of personal data out of the European Union to the United States, enhances
enforcement authority and imposes large penalties for noncompliance, including the potential for fines of up to
€20 million or 4% of the annual global revenues of the infringer, whichever is greater. While we have taken steps to
comply with the GDPR, including such as reviewing our security procedures and entering into data processing
agreements with relevant contractors, we cannot assure you that our efforts to remain in compliance will be fully
successful.
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Further, unauthorized access, loss or dissemination of sensitive information could also disrupt our operations,
including our ability to conduct research and development activities, process and prepare company financial information,
manage various general and administrative aspects of our business and damage our reputation, any of which could
adversely affect our reputation and our business. In addition, there can be no assurance that we will promptly detect any
such disruption or security breach, if at all. To the extent that any disruption or security breach were to result in a loss of
or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could
incur liability and the further development of our products could be delayed.
We face risks related to handling of hazardous materials and other regulations governing environmental safety.
Our operations are subject to complex and stringent environmental, health, safety and other governmental laws
and regulations that both public officials and private individuals may seek to enforce. Our activities that are subject to
these regulations include, among other things, our use of hazardous materials and the generation, transportation and
storage of waste. Although we have secured clearance from the EPA historically, and currently are operating in
compliance with applicable EPA rules and regulations, our business could be adversely affected if we discover that we
or an acquired business is not in material compliance with these rules and regulations. In the future, we may pursue the
use of other surfactant substances that will require clearance from the EPA, and we may fail to obtain such clearance.
Existing laws and regulations may also be revised or reinterpreted, or new laws and regulations may become applicable
to us, whether retroactively or prospectively, that may have a negative effect on our business and results of operations. It
is also impossible to eliminate completely the risk of accidental environmental contamination or injury to individuals. In
such an event, we could be liable for any damages that result, which could adversely affect our business.
Risks Related to Intellectual Property
If we are unable to protect our intellectual property, it may reduce our ability to maintain any technological or
competitive advantage over our competitors and potential competitors, and our business may be harmed.
We rely on patent protection as well as trademark, copyright, trade secret and other intellectual property rights
protection and contractual restrictions to protect our proprietary technologies, all of which provide limited protection and
may not adequately protect our rights or permit us to gain or keep any competitive advantage. If we fail to protect our
intellectual property, third parties may be able to compete more effectively against us, we may lose our technological or
competitive advantage, or we may incur substantial litigation costs in our attempts to recover or restrict use of our
intellectual property.
We cannot assure investors that any of our currently pending or future patent applications will result in granted
patents, and we cannot predict how long it will take for such patents to be granted. It is possible that, for any of our
patents that have granted or that may grant in the future, others will design around our patented technologies. Further, we
cannot assure investors that other parties will not challenge any patents granted to us or that courts or regulatory agencies
will hold our patents to be valid or enforceable. We cannot guarantee investors that we will be successful in defending
challenges made against our patents and patent applications. Any successful third-party challenge to our patents could
result in the unenforceability or invalidity of such patents, or to such patents being interpreted narrowly or otherwise in a
manner adverse to our interests. Our ability to establish or maintain a technological or competitive advantage over our
competitors may be diminished because of these uncertainties. For these and other reasons, our intellectual property may
not provide us with any competitive advantage. To the extent our intellectual property offers inadequate protection, or is
found to be invalid or unenforceable, we would be exposed to a greater risk of direct competition. If our intellectual
property does not provide adequate coverage over our products and protection against our competitors’ products, our
competitive position could be adversely affected, as could our business.
In addition to pursuing patents on our technology, we also rely upon trademarks, trade secrets, copyrights and
unfair competition laws, as well as license agreements and other contractual provisions, to protect our intellectual
property and other proprietary rights. Despite these measures, any of our intellectual property rights could be challenged,
invalidated, circumvented or misappropriated. In addition, we take steps to protect our intellectual property and
proprietary technology by entering into confidentiality agreements and intellectual property assignment agreements with
our employees, consultants, corporate partners and, when needed, our advisors. Such agreements may not be enforceable
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or may not provide meaningful protection for our trade secrets or other proprietary information in the event of
unauthorized use or disclosure or other breaches of the agreements, and we may not be able to prevent such unauthorized
disclosure. Moreover, if a party having an agreement with us has an overlapping or conflicting obligation to a
third party, our rights in and to certain intellectual property could be undermined. Monitoring unauthorized disclosure is
difficult, and we do not know whether the steps we have taken to prevent such disclosure are, or will be, adequate. If we
were to enforce a claim that a third party had illegally obtained and was using our trade secrets, it would be expensive
and time-consuming, the outcome would be unpredictable, and any remedy may be inadequate. In addition, courts
outside of the United States may be less willing to protect trade secrets.
Some of our owned and in-licensed intellectual property has been discovered through government-funded programs
and thus is subject to federal regulations such as “march-in” rights, certain reporting requirements, and a preference
for U.S. industry. Compliance with such regulations may limit our exclusive rights, subject us to expenditure of
resources with respect to reporting requirements, and limit our ability to contract with non-U.S. manufacturers.
Some of the intellectual property rights we own and have in-licensed have been generated through the use of
U.S. government funding and are therefore subject to certain federal regulations. For example, some of the issued U.S.
patents we own and all of the intellectual property rights licensed to us under our license agreement with Tufts have been
generated using U.S. government funds. As a result, the U.S. government has certain rights to intellectual property
embodied in our current or future products pursuant to the Bayh-Dole Act of 1980 (the Bayh-Dole Act). These U.S.
government rights in certain inventions developed under a government-funded program include a non-exclusive,
non-transferable, irrevocable worldwide license to use inventions for any governmental purpose. In addition, the U.S.
government has the right to require us to grant exclusive, partially exclusive, or non-exclusive licenses to any of these
inventions to a third party if the government determines that: (i) adequate steps have not been taken to commercialize the
invention; (ii) government action is necessary to meet public health or safety needs; or (iii) government action is
necessary to meet requirements for public use under federal regulations (also referred to as “march-in rights”). The U.S.
government also has the right to take title to these inventions if we fail, or the applicable licensor fails, to disclose the
invention to the government, elect title, and file an application to register the intellectual property within specified time
limits. In addition, the U.S. government may acquire title to these inventions in any country in which a patent application
is not filed within specified time limits. Intellectual property generated under a government funded program is also
subject to certain reporting requirements, compliance with which may require us, or the applicable licensor, to expend
substantial resources. In addition, the U.S. government requires that any products embodying the subject invention or
produced through the use of the subject invention be manufactured substantially in the United States. The manufacturing
preference requirement can be waived if the owner of the intellectual property can show that reasonable but unsuccessful
efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture
substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible.
This preference for U.S. manufacturing may limit our ability to license the applicable patent rights on an exclusive basis
under certain circumstances.
If we enter into future arrangements involving government funding, and we make inventions as a result of such
funding, intellectual property rights to such discoveries may be subject to the applicable provisions of the Bayh-Dole
Act. To the extent any of our current or future intellectual property is generated through the use of U.S. government
funding, the provisions of the Bayh-Dole Act may similarly apply. Any exercise by the government of certain of its
rights could harm our competitive position, business, financial condition, results of operations and prospects.
Our Simoa bead-based technology is licensed to us by Tufts University. Any loss of our rights to this technology could
prevent us from selling our products.
Our Simoa bead-based technology is licensed exclusively to us from Tufts University. We do not own the
patents that underlie this license. Our rights to use this technology and employ the inventions claimed in the licensed
patents are subject to the continuation of and compliance with the terms of the license. Our principal obligations under
our license agreement with Tufts are as follows:
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royalty payments;
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• milestone payments;
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annual maintenance fees;
using commercially reasonable efforts to develop and sell a product using the licensed technology and
developing a market for such product;
paying and/or reimbursing fees related to prosecution, maintenance and enforcement of patent rights; and
providing certain reports.
If we breach any of these obligations, Tufts may have the right to terminate the license, which could result in
our being unable to develop, manufacture and sell products using our Simoa bead-based technology or a competitor’s
gaining access to the Simoa technology. Termination of our license agreement with Tufts would have a material adverse
effect on our business.
In addition, we are a party to a number of other agreements that include licenses to intellectual property,
including non-exclusive licenses. We expect that we may need to enter into additional license agreements in the future.
Our business could suffer, for example, if any current or future licenses terminate, if the licensors fail to abide by the
terms of the license, if the licensed patents or other rights are found to be invalid or unenforceable, or if we are unable to
enter into necessary licenses on acceptable terms.
We may need or may choose to obtain licenses from third parties to advance our research or allow commercialization
of our current or future products, and we cannot provide any assurances that we would be able to do so.
We may need or may choose to obtain licenses from third parties to advance our research or allow
commercialization of our current or future products, and we cannot provide any assurances that third-party patents do
not exist that might be enforced against our current or future products in the absence of such a license. We may fail to
obtain any of these licenses on commercially reasonable terms, if at all. Even if we are able to obtain a license, it may be
non-exclusive, thereby giving our competitors access to the same technologies licensed to us. If we could not obtain a
license, we may be required to expend significant time and resources to develop or license replacement technology. If
we are unable to do so, we may be unable to develop or commercialize the affected products, which could materially
harm our business and the third parties owning such intellectual property rights could seek either an injunction
prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of
compensation.
Licensing of intellectual property involves complex legal, business and scientific issues. Disputes may arise
between us and our licensors regarding intellectual property subject to a license agreement. If disputes over intellectual
property that we have licensed prevent or impair our ability to maintain the licensing arrangements on acceptable terms,
we may be unable to successfully develop and commercialize the affected product, or the dispute may have an adverse
effect on our results of operation.
In addition to agreements pursuant to which we in-license intellectual property, we have in the past and expect
to in the future to grant licenses under our intellectual property. Like in-licenses, out-licenses are complex, and disputes
may arise between us and our licensees. Moreover, our licensees may breach their obligations, or we may be exposed to
liability due to our failure or alleged failure to satisfy our obligations. Any such occurrence could have an adverse effect
on our business.
If we or any of our partners are sued for infringing intellectual property rights of third parties, it would be costly and
time-consuming, and an unfavorable outcome in that litigation could have a material adverse effect on our business.
Our success also depends on our ability to develop, manufacture, market and sell our products and perform our
services without infringing upon the proprietary rights of third parties. Numerous U.S. and foreign-issued patents and
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pending patent applications owned by third parties exist in the fields in which we are developing products and services.
As part of a business strategy to impede our successful commercialization and entry into new markets, competitors have
claimed, and may claim in the future, that our products and/or services infringe their intellectual property rights and have
suggested, and may suggest in the future, that we enter into license agreements. Any such claims made to date are, we
believe, without merit.
Even if such claims are without merit, we could incur substantial costs and divert the attention of our
management and technical personnel in defending ourselves against claims of infringement made by third parties or
settling such claims. Any adverse ruling by a court or administrative body, or perception of an adverse ruling, may have
a material adverse impact on our ability to conduct our business and our finances. Moreover, third parties making claims
against us may be able to obtain injunctive relief against us, which could block our ability to offer one or more products
or services and could result in a substantial award of damages against us. In addition, since we sometimes indemnify
customers, collaborators or licensees, we may have additional liability in connection with any infringement or alleged
infringement of third-party intellectual property.
Because patent applications can take many years to issue, there may be pending applications, some of which are
unknown to us, that may result in issued patents upon which our products or proprietary technologies may infringe.
Moreover, we may fail to identify issued patents of relevance or incorrectly conclude that an issued patent is invalid or
not infringed by our technology or any of our products. There is a substantial amount of litigation involving patent and
other intellectual property rights in our industry. If a third party claims that we or any of our licensors, customers or
collaboration partners infringe upon a third party’s intellectual property rights, we may have to:
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seek to obtain licenses that may not be available on commercially reasonable terms, if at all;
abandon any infringing product or redesign our products or processes to avoid infringement;
pay substantial damages including, in an exceptional case, treble damages and attorneys’ fees, which we
may have to pay if a court decides that the product or proprietary technology at issue infringes upon or
violates the third-party’s rights;
pay substantial royalties or fees or grant cross-licenses to our technology; or
defend litigation or administrative proceedings that may be costly whether we win or lose, and which could
result in a substantial diversion of our financial and management resources.
We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be
expensive, time-consuming and unsuccessful.
Competitors may infringe our patents or the patents that we license. In the event of infringement or
unauthorized use, we may file one or more infringement lawsuits, which can be expensive and time-consuming. An
adverse result in any such litigation proceedings could put one or more of our patents at risk of being invalidated, found
to be unenforceable or interpreted narrowly, and it could put our patent applications at risk of not issuing. Furthermore,
because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk
that some of our confidential information could be compromised by disclosure during this type of litigation.
Many of our competitors are larger than we are and have substantially greater resources. They are, therefore,
likely to be able to sustain the costs of complex patent litigation longer than we could. In addition, the uncertainties
associated with litigation could have a material adverse effect on our ability to raise any funds necessary to continue our
operations, continue our internal research programs, in-license needed technology, or enter into development
partnerships that would help us bring our products to market.
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In addition, patent litigation can be very costly and time-consuming. An adverse outcome in such litigation or
proceedings may expose us or any of our future development partners to loss of our proprietary position, expose us to
significant liabilities, or require us to seek licenses that may not be available on commercially acceptable terms, if at all.
Our issued patents could be found invalid or unenforceable if challenged in court, which could have a material
adverse impact on our business.
If we or any of our partners were to initiate legal proceedings against a third party to enforce a patent covering
one of our products or services, the defendant in such litigation could counterclaim that our patent is invalid and/or
unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or
unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several
statutory requirements, including lack of novelty, obviousness or non-enablement, or failure to claim patent eligible
subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected with
prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during
prosecution. Third parties may also raise similar claims before the USPTO even outside of the context of litigation. The
outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity
question, for example, we cannot be certain that there is no invalidating prior art of which we and the patent examiner
were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or
unenforceability, we would lose at least part, and perhaps all, of the challenged patent. Such a loss of patent protection
would have a material adverse impact on our business.
We may not be able to protect our intellectual property rights throughout the world, which could materially,
negatively affect our business.
Filing, prosecuting and defending patents on current and future products in all countries throughout the world
would be prohibitively expensive, and our intellectual property rights in some countries outside of the United States can
be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect
intellectual property rights to the same extent that federal and state laws do in the United States. Consequently,
regardless of whether we are able to prevent third parties from practicing our inventions in the United States, we may not
be able to prevent third parties from practicing our inventions in all countries outside of the United States, or from
selling or importing products made by using our inventions in and into the United States or other jurisdictions.
Competitors may use our technologies in jurisdictions where we have not pursued and obtained patent protection to
develop their own products, and further, may export otherwise infringing products to territories where we have patent
protection, but enforcement is not as strong as it is in the United States. These products may compete with our products
and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
Even if we pursue and obtain issued patents in particular jurisdictions, our patent claims or other intellectual property
rights may not be effective or sufficient to prevent third parties from competing. Patent protection must ultimately be
sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes.
Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent
protection in such countries.
Many companies have encountered significant problems in protecting and defending intellectual property rights
in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the
enforcement of patents and other intellectual property protection, particularly those relating to biotechnology, which
could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of
our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in
substantial costs and divert our efforts and attention from other aspects of our business, put our patents at risk of being
invalidated or interpreted narrowly and our patent applications at risk of not issuing, and provoke third parties to assert
claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if
any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the
world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or
license and may adversely impact our business.
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In addition, we and our partners also face the risk that our products are imported or reimported into markets
with relatively higher prices from markets with relatively lower prices, which would result in a decrease of sales and any
payments we receive from the affected market. Recent developments in U.S. patent law have made it more difficult to
stop these and related practices based on theories of patent infringement.
Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our
ability to protect our products.
The America Invents Act (the AIA) was signed into law on September 16, 2011, and many of the substantive
changes became effective on March 16, 2013. An important change introduced by the AIA is that, as of March 16, 2013,
the United States transitioned to a “first-to-file” system for deciding which party should be granted a patent when two or
more patent applications are filed by different parties claiming the same invention. A third party that files a patent
application in the USPTO after that date but before us could therefore be awarded a patent covering an invention of ours
even if we had made the invention before it was made by the third party. This will require us to be cognizant of the time
from invention to the filing of a patent application, but circumstances could prevent us from promptly filing patent
applications on our inventions.
Among some of the other changes introduced by the AIA are changes that limit where a patent holder may file a
patent infringement suit and provide additional opportunities for third parties to challenge any issued patent in the
USPTO. This applies to all of our owned and in-licensed U.S. patents, even those issued before March 16, 2013.
Because of a lower evidentiary standard in USPTO proceedings, compared to the evidentiary standard in U.S. federal
courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding
sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the
claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to
invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a
district court action. The AIA and its implementation could increase the uncertainties and costs surrounding the
prosecution of our patent applications and the enforcement or defense of our issued patents.
Additionally, the U.S. Supreme Court has ruled on several patent cases in recent years, such as Impression
Products, Inc. v. Lexmark International, Inc., Association for Molecular Pathology v. Myriad Genetics, Inc., Mayo
Collaborative Services v. Prometheus Laboratories, Inc. and Alice Corporation Pty. Ltd. v. CLS Bank International,
either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent
owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future,
this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on
decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could
change in unpredictable ways that could weaken our ability to obtain new patents or to enforce our existing patents and
patents that we might obtain in the future.
If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition
in our markets of interest and our business may be adversely affected.
Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, declared
generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and
trade names, which we need to build name recognition by potential partners or customers in our markets of interest. At
times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand
identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark
infringement claims brought by owners of other registered trademarks. Over the long term, if we are unable to establish
name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our
business may be adversely affected.
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We use third-party software that may be difficult to replace or may cause errors or failures of our products that could
lead to lost customers or harm to our reputation.
We use software licensed from third parties in our products. In the future, this software may not be available to
us on commercially reasonable terms, or at all. Any loss of the right to use any of this software could result in delays in
the production of our products until equivalent technology is either developed by us, or, if available, is identified,
obtained and integrated, which could harm our business. In addition, any errors or defects in third-party software or other
third-party software failures could result in errors, defects or cause our products to fail, which could harm our business
and be costly to correct. Many of these providers attempt to impose limitations on their liability for such errors, defects
or failures, and if enforceable, we may have additional liability to our customers or third-party providers that could harm
our reputation and increase our operating costs.
We will need to maintain our relationships with third-party software providers and to obtain software from such
providers that does not contain any errors or defects. Any failure to do so could adversely impact our ability to deliver
reliable products to our customers and could harm our reputation and results of operations.
Risks Related to Our Common Stock and Being a Public Company
We expect that our stock price may fluctuate significantly.
The market price of shares of our common stock has been and could continue to be subject to wide fluctuations
in response to many factors listed in this section, and others beyond our control, including:
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actual or anticipated fluctuations in our financial condition and operating results;
announcements by us, our partners or our competitors of new products, significant contracts, strategic
partnerships, joint ventures, collaborations, acquisitions, commercial relationships or capital commitments;
competition from existing products or new products that may emerge;
failure to meet or exceed financial estimates and projections of the investment community or that we may
provide to the public;
issuance of new or updated research or reports by securities analysts or recommendations for our stock;
positive or adverse regulatory announcements;
disputes or other developments related to proprietary rights, including patents, litigation matters, and our
ability to obtain patent protection for our technologies;
commencement of, or our involvement in, litigation;
fluctuations in the valuation of companies perceived by investors to be comparable to us;
conditions in our markets;
• manufacturing disputes or delays;
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any future sales of our common stock or other securities;
any change to the composition of our board of directors or key personnel;
general economic conditions and slow or negative growth of our markets;
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share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
announcement or expectation of additional debt or equity financing efforts; and
other factors described in this Risk Factors section of this Annual Report on Form 10-K.
These and other market and industry factors may cause the market price and demand for our common stock to
fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from readily
selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock. In addition,
the stock market in general, and life science companies in particular, have experienced extreme price and volume
fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. In the
past, when the market price of a stock has been volatile, holders of that stock have on occasion instituted securities class
action litigation against the company that issued the stock. If any of our stockholders were to bring a lawsuit against us,
the defense and disposition of the lawsuit could be costly and divert the time and attention of our management and harm
our operating results.
If securities or industry analysts do not publish research reports about our business, or if they issue an adverse
opinion about our business, our stock price and trading volume could decline.
The trading market for our common stock will be influenced by the research and reports that industry or
securities analysts publish about us or our business. If one or more of the analysts who cover us issues an adverse
opinion about our company, our stock price would likely decline. If one or more of these analysts ceases coverage of us
or fails to regularly publish reports on us, we could lose visibility in the public markets, which could cause our stock
price or trading volume to decline.
We have never paid dividends on our capital stock, and we do not anticipate paying any dividends in the foreseeable
future. Consequently, any gains from an investment in our common stock will likely depend on whether the price of
our common stock increases.
We have not paid dividends on any of our classes of capital stock to date and we currently intend to retain our
future earnings, if any, to fund the development and growth of our business. As a result, capital appreciation, if any, of
our common stock will be your sole source of gain for the foreseeable future. Consequently, in the foreseeable future,
you will likely only experience a gain from an investment in our common stock if the price of our common stock
increases.
Anti-takeover provisions contained in our restated certificate of incorporation and restated by-laws, as well as
provisions of Delaware law, could impair a takeover attempt.
Our restated certificate of incorporation, restated by-laws and Delaware law contain provisions which could
have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our board of
directors. Our corporate governance documents include provisions:
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authorizing our board of directors to issue up to 5,000,000 shares of preferred stock without stockholder
approval upon the terms and conditions and with the rights, privileges and preferences as our board of
directors may determine;
specifying that special meetings of our stockholders can be called only by our board of directors and that
our stockholders may not act by written consent;
establishing an advance notice procedure for stockholder proposals to be brought before an annual meeting
of our stockholders, including proposed nominations of persons for election to our board of directors;
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providing that directors may be removed only for cause;
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providing that our board of directors may create new directorships and that vacancies on our board of
directors may be filled only by a majority of directors then in office, even though less than a quorum;
establishing that our board of directors is divided into three classes—Class I, Class II, and Class III—with
each class serving staggered three-year terms;
providing that our board of directors may amend our restated by-laws without stockholder approval; and
requiring a super-majority of votes to amend certain of the above-mentioned provisions.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes
in our management.
As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the
Delaware General Corporation law, which prevents some stockholders holding more than 15% of our outstanding
common stock from engaging in certain business combinations without approval of the holders of substantially all of our
outstanding common stock.
Any provision of our restated certificate of incorporation, restated by-laws or Delaware law that has the effect
of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for
their shares of our common stock, and could also affect the price that some investors are willing to pay for our common
stock.
We incur increased costs and devote substantial management time as a result of operating as a public company.
As a public company, we incur significant legal, accounting and other expenses that we did not incur as a
private company. We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the
Dodd-Frank Wall Street Reform and Protection Act, as well as rules adopted, and to be adopted, by the SEC and The
Nasdaq Global Market. Our management and other personnel devote a substantial amount of time to these compliance
initiatives. Moreover, these rules and regulations substantially increase our legal and financial compliance costs and
make some activities more time-consuming and costly. These costs increase our net loss. For example, we expect these
rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance
and we may be required to incur substantial costs to maintain the sufficient coverage. We cannot predict or estimate the
amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements
could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our
board committees or as executive officers.
In addition, as a public company we incur additional costs and obligations in order to comply with SEC
rules that implement Section 404 of the Sarbanes-Oxley Act. Under these rules, we are required to make a formal
assessment of the effectiveness of our internal control over financial reporting and to include an attestation report on
internal control over financial reporting issued by our independent registered public accounting firm. To achieve timely
compliance with Section 404, we are engaged in a process to document and evaluate our internal control over financial
reporting, which is both costly and challenging. The process of obtaining the attestation report from our independent
registered public accounting firm is costly and requires the devotion of significant management attention and resources.
We have been required to dedicate internal resources, engage outside consultants and adopt a detailed work plan to
assess and document the adequacy of our internal control over financial reporting, continue steps to improve control
processes as appropriate, validate through testing that controls are designed and operating effectively, and implement a
continuous reporting and improvement process for internal control over financial reporting. If we identify one or more
material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the
reliability of our financial statements.
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Item 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
Item 2. PROPERTIES
We currently lease approximately 91,600 square feet of office, laboratory, and manufacturing space at our
headquarters in Billerica, Massachusetts. In addition, in the first quarter of 2022, we executed a lease for 85,800 square
feet of office and laboratory space in Bedford, Massachusetts. The premises covered by these leases serve as our
principal office and laboratory space. The initial term of the Billerica lease is eleven years and five months beginning on
April 1, 2019, and we have the option to extend the lease for two additional five-year periods. The initial term of the
Bedford lease is eight years and nine months beginning on the earlier of our occupancy, or May 1, 2022. We believe that
these office, laboratory, and manufacturing spaces will be sufficient to meet our needs for the foreseeable future.
In addition, our subsidiary, Uman, leases a total of approximately 6,500 square feet of office, laboratory,
manufacturing and storage space in Umeå, Sweden. These leases expire at various dates through February 28, 2023.
Item 3. LEGAL PROCEEDINGS
We are not currently a party to any material legal proceedings.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is traded on The Nasdaq Global Market under the symbol “QTRX.”
Stockholders
As of February 23, 2022, there were approximately 23 stockholders of record of our common stock.
Unregistered Sales of Securities
There were no unregistered sales of equity securities during the fourth quarter ended December 31, 2021.
Issuer Purchases of Equity Securities
Not applicable.
Item 6. RESERVED
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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in
conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on
Form 10-K. In addition to historical consolidated financial information, the following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from
those discussed in the forward-looking statements. See “Special Note Regarding Forward-Looking Statements.” Factors
that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on
Form 10-K, particularly in “Risk Factors.” Results of operations for the fiscal year ended December 31, 2019 can be
referenced on our 2020 Annual Report on Form 10-K filed with the SEC on March 5, 2021.
Overview
We are a life sciences company that has developed next generation, ultra-sensitive digital immunoassay
platforms that advance precision health for life sciences research and diagnostics. Our platforms are based on our
proprietary digital “Simoa” detection technology. Our Simoa bead-based and planar array platforms enable customers to
reliably detect protein biomarkers in extremely low concentrations in blood, serum and other fluids that, in many cases,
are undetectable using conventional, analog immunoassay technologies, and also allow researchers to define and validate
the function of novel protein biomarkers that are only present in very low concentrations. These capabilities provide our
customers with insight into the role of protein biomarkers in human health that has not been possible with other existing
technologies and enable researchers to unlock unique insights into the continuum between health and disease. We
believe this greater insight will enable the development of novel therapies and diagnostics and facilitate a paradigm shift
in healthcare from an emphasis on treatment to a focus on earlier detection, monitoring, prognosis and, ultimately,
prevention.
Our instruments are designed to be used either with assays fully developed by us, including all antibodies and
supplies required to run the tests, or with “homebrew” kits where we supply some of the components required for
testing, and the customer supplies the remaining required elements. Accordingly, our installed instruments generate a
recurring revenue stream. As the installed base of the Simoa instruments increases, total consumables revenue overall is
expected to increase. We believe that consumables revenue should be subject to less period-to-period fluctuation than
our instrument sales revenue, and will become an increasingly important contributor to our overall revenue.
We commercially launched our first immunoassay platform, the Simoa HD-1, in January 2014. The HD-1 is
based on our bead-based technology, and assays run on the HD-1 are fully automated. We initiated commercial launch
of the SR-X instrument in December 2017. The SR-X utilizes the same Simoa bead-based technology and assay kits as
the HD-1 in a compact benchtop form with a lower price point, more flexible assay preparation, and a wider range of
applications. In July 2019, we launched the Simoa HD-X, an upgraded version of the Simoa HD-1, which replaces the
HD-1. The HD-X has been designed to deliver significant productivity and operational efficiency improvements, as well
as greater user flexibility. We began shipping and installing HD-X instruments at customer locations in 2019, and by the
end of 2021, approximately 68% of the HD instrument installed base was HD-X instruments.
On January 30, 2018, we acquired Aushon for $3.2 million in cash, with an additional payment of $0.8 million
made in July 2018, six months after the acquisition date. With the acquisition of Aushon, we acquired a CLIA certified
laboratory, as well as Aushon’s proprietary sensitive planar array detection technology. Leveraging our proprietary
sophisticated Simoa image analysis and data analysis algorithms, we further refined this planar array technology to
develop the SP-X instrument to provide the same Simoa sensitivity found in our Simoa bead-based platform. We
initiated an early-access program for the SP-X instrument in January 2019, with the full commercial launch commenced
in April 2019.
On August 1, 2019, we completed our acquisition of Uman for an aggregate purchase price of $21.2 million,
comprised of (i) $15.7 million in cash plus (ii) 191,152 shares of our common stock (representing $5.5 million based on
the closing prices of our common stock on the Nasdaq Global Market on July 1, 2019 and August 1, 2019, the dates of
issuance). Uman supplies neurofilament light (Nf-L) antibodies and ELISA kits, which are widely recognized by
69
researchers and biopharmaceutical and diagnostics companies world-wide as the premier solution for the detection of
Nf-L to advance the development of therapeutics and diagnostics for neurodegenerative conditions.
We also provide contract research services for customers through our CLIA-certified Accelerator Laboratory.
The Accelerator Laboratory provides customers with access to Simoa technology, and supports multiple projects and
services, including sample testing, homebrew assay development and custom assay development. To date, we have
completed over 1,700 projects for approximately 400 customers from all over the world using our Simoa platforms.
We sell our instruments, consumables and services to the life science, pharmaceutical and diagnostics industries
through a direct sales force and support organizations in North America and Europe, and through distributors or sales
agents in other select markets, including Australia, Brazil, China, Czech Republic, India, Hong Kong, Israel, Japan, New
Zealand, Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan, and UAE. In addition, Uman sells Nf-L
antibodies and Nf-L ELISA kits directly, and in conjunction with us and another distributor worldwide. We have an
extensive base of customers in world class academic and governmental research institutions, as well as pharmaceutical,
biotechnology and contract research companies.
On September 29, 2020, we entered the Abbott License Agreement with Abbott. Pursuant to the terms of the
Abbott License Agreement, we granted Abbott a non-exclusive, worldwide, royalty-bearing license, without the right to
sublicense, under our bead-based single molecule detection patents in the field of IVD. Abbott paid an initial license fee
of $10.0 million in connection with the execution of the Abbott License Agreement, which was recognized as license
revenue for the year ended December 31, 2020. Abbott has also agreed to pay us milestone fees subject to the
achievement by Abbott of certain development, regulatory and commercialization milestones and low single digit
royalties on net sales of licensed products.
We are subject to ongoing uncertainty concerning the COVID-19 pandemic, including its length and severity
and its effect on our business. During the first and second quarters of 2020, we implemented a resiliency plan focused on
the health and safety of our employees and maintaining continuity of our operations. We saw an impact on instrument
revenue due to limitations on our ability to access certain customer sites and complete instrument installations, as well as
an impact on consumables revenue from interruptions in certain customer laboratories through the first quarter of 2021.
As customers began returning to normal operations in the second quarter of 2021, we have seen less of an impact related
to COVID-19 related shutdowns. However, we expect COVID-19 related challenges to continue for the foreseeable
future and potentially increase if variants result in new shutdowns.
In view of the COVID-19 pandemic, in 2020, we adjusted our operations to expand capacity in our Accelerator
Laboratory to support customers whose operations have been disrupted and to sustain clinical trials. We also determined
that our cytokine assay technology could provide researchers with important and differentiated tools to study disease
progression, cytokine release syndrome, and patient-treatment response in the fight against COVID-19, and began
developing a SARS-CoV-2 semi-quantitative IgG assay and a SARS-CoV-2 antigen detection assay, and prototyping a
high-definition multiplex SARS-CoV-2 serology assay. In December 2020, the FDA issued an EUA for our Simoa
Semi-Quantitative SARS-CoV-2 IgG Antibody Test, and in January 2021, the FDA issued an EUA for our Simoa
SARS-CoV-2 N Protein Antigen Test, each of which is run on our HD-X instrument. In September 2021, the FDA
expanded the EUA for our Simoa SARS-CoV-2 N Protein Antigen Test to include testing with nasal swabs and saliva
and for asymptomatic serial testing with nasal swab samples. We are exploring extending the test to home-based sample
collection and pooling to enable larger scale testing.
In September 2020, we entered into WP2 with the NIH under the RADx program. This contract, which has a
total award value of up to $18.2 million, is intended to accelerate the continued development, scale-up and deployment
of our novel SARS-CoV-2 antigen test. Initial early feasibility of this test was funded in part through the RADx WP1
award we were granted in June 2020. WP2 supports clinical validation of the test in support of the EUA submissions
with the FDA, and provides funding to expand assay kit manufacturing capacity and commercial deployment readiness.
Contract funding was subject to the achievement of pre-defined milestones and the contract period ran through
September 2021, with one milestone extended to March 31, 2022. As of December 31, 2021, we had received
$17.7 million out of the full $18.2 million under WP2.
70
The COVID-19 situation remains dynamic, and there remains significant uncertainty as to the length and
severity of the pandemic, the actions that may be taken by government authorities, the impact to the business of our
customers and suppliers, the long-term economic implications and other factors identified in “Part I, Item 1A, Risk
Factors” of this Annual Report on Form 10-K. We will continue to evaluate the nature and extent of the impact to our
business, financial condition, and operating results.
As of December 31, 2021, we had cash and cash equivalents of $396.5 million. Since inception, we have
incurred annual net losses. Our net loss was $57.7 million, $31.5 million, and $40.8 million for the years ended
December 31, 2021, 2020, and 2019, respectively. As of December 31, 2021, we had an accumulated deficit of
$305.5 million and stockholders' equity of $441.0 million. We expect to continue to incur significant expenses and
operating losses at least through the next 24 months. We expect our expenses will increase substantially as we:
•
•
•
•
•
•
•
•
expand our sales and marketing efforts to further commercialize our products;
strategically acquire companies or technologies that may be complementary to our business;
expand our research and development efforts to improve our existing products and develop and launch
new products, particularly if any of our products are deemed by the FDA to be medical devices or
otherwise subject to additional regulation by the FDA;
seek PMA or 510(k) clearance from the FDA for our existing products or new products if or when we
decide to market products for use in the prevention, diagnosis or treatment of a disease or other
condition;
hire additional personnel and continue to grow our employee headcount;
enter into collaboration arrangements, if any, or in-license other products and technologies;
add operational, financial and management information systems; and
continue to incur increased costs as a result of operating as a public company.
Financial Operations Overview
Revenue
Under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606 -
Revenue from Contracts with Customers (ASC 606), an entity recognizes revenue when its customer obtains control of
promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for
those goods or services. To determine revenue recognition for arrangements that an entity determines are within the
scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify
the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any;
(iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or
as) the entity satisfies a performance obligation. We only apply the five-step model to contracts when it is probable that
the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the
customer.
Once a contract is determined to be within the scope of ASC 606, we assess the goods or services promised
within each contract and determine those that are performance obligations. Arrangements that include rights to
additional goods or services that are exercisable at a customer’s discretion are generally considered options. We assess if
these options provide a material right to the customer and if so, they are considered performance obligations. The
identification of material rights requires judgments related to the determination of the value of the underlying license
relative to the option exercise price, including assumptions about technical feasibility and the probability of developing a
candidate that would be subject to the option rights. The exercise of a material right is accounted for as a contract
modification for accounting purposes.
71
The transaction price is then determined and allocated to the identified performance obligations in proportion to
their standalone selling prices (SSP) on a relative SSP basis. SSP is determined at contract inception and is not updated
to reflect changes between contract inception and when the performance obligations are satisfied. Determining the SSP
for performance obligations requires significant judgment. In developing the SSP for a performance obligation, we
consider applicable market conditions and relevant entity-specific factors, including factors that were contemplated in
negotiating the agreement with the customer and estimated costs. We validate the SSP for performance obligations by
evaluating whether changes in the key assumptions used to determine the SSP will have a significant effect on the
allocation of arrangement consideration between multiple performance obligations.
We generate product revenue primarily from sales of our HD-X, HD-1, SR-X, and SP-X instruments and
related reagents and other consumables. We currently sell our products for RUO applications and our customers are
primarily laboratories associated with academic and governmental research institutions, as well as pharmaceutical,
biotechnology and contract research companies. Sales of our consumables have consistently increased due to an
increasing number of instruments being installed in the field, all of which require certain of our consumables to run
customers’ specific tests. Consumable revenue consists of sales of complete assays which are developed internally by us,
plus sales of “homebrew” kits which contain all the elements necessary to run tests with the exception of the specific
antibodies utilized which are separately provided by the customer.
Service and other revenue consists of testing services provided by us in our Accelerator Laboratory on behalf of
certain research customers, in addition to warranty and other service-based revenue. Services provided in our
Accelerator Laboratory include sample testing, homebrew assay development and custom assay development.
Collaboration and license revenue consists of revenue associated with licensing our technology to third parties
and for related services.
Grants received by us that do not require the transfer of goods or services to a customer are accounted for by
analogy to International Accounting Standards (IAS) 20, Accounting for Government Grants and Disclosure of
Government Assistance (IAS 20). Under IAS 20, we recognize revenue as the matching expense or asset is incurred or
capitalized.
Cost of Products, Services and Collaboration Revenue
Cost of goods sold for products consists of HD-X, HD-1, and SR-X instrument costs from the manufacturer.
Cost of goods sold for SP-X consists of costs based on the internal assembly of this item. Raw material part costs,
associated freight, shipping and handling costs, contract manufacturer costs, salaries, personnel costs, royalties,
stock-based compensation, overhead and other direct costs related to those sales are classified as cost of goods sold for
products.
Cost of goods sold for services consists of salaries and other personnel costs, royalties, stock-based
compensation and facility costs associated with operating the Accelerator Laboratory on behalf of customers, in addition
to costs related to warranties and other costs of servicing equipment at customer sites.
Cost of collaboration revenue consists of royalty expense due to third parties from revenue generated by
collaboration or license deals.
Research and Development Expenses
Research and development expenses consist of salaries and other personnel costs, stock-based compensation,
research supplies, third-party development costs for new products, materials for prototypes, and allocated overhead costs
that include facility and other overhead costs. We have made substantial investments in research and development since
our inception, and plan to continue to make substantial investments in the future. Our research and development efforts
have focused primarily on the tasks required to support development and commercialization of new and existing
products. We believe that our continued investment in research and development is essential to our long-term
72
competitive position and expect these expenses to increase in future periods. Additionally, costs incurred related to grant
revenue are recorded as research and development expenses.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries and other personnel costs, and
stock-based compensation for our sales and marketing, finance, legal, human resources and general management, as well
as professional services, such as legal and accounting services. We expect selling, general and administrative expenses to
increase in future periods as the number of sales, technical support and marketing and administrative personnel grows
and we continue to introduce new products, broaden our customer base and grow our business. We also expect to incur
additional public company expenses, including expenses related to compliance with the rules and regulations of the SEC
and the Nasdaq Stock Market, additional insurance expenses, and expenses related to investor relations activities and
other administrative and professional services.
Critical Accounting Policies, Significant Judgments and Estimates
Our consolidated financial statements and the related notes included elsewhere in this Annual Report on
Form 10-K are prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP).
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on
historical experience and on various other assumptions that we believe to be reasonable under the circumstances.
Changes in accounting estimates may occur from period to period. Accordingly, actual results could differ significantly
from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the
extent that there are material differences between these estimates and actual results, our future financial statement
presentation, financial condition, results of operations and cash flows will be affected.
We believe that the following critical accounting policies involve a greater degree of judgment and complexity
than our other significant accounting policies. Accordingly, these are the policies we believe are the most critical to
understanding and evaluating our consolidated financial condition and results of operations. Our significant accounting
policies are more fully described in “Significant Accounting Policies” (Note 2) in the notes to our consolidated financial
statements included elsewhere in this Annual Report on Form 10-K.
Revenue Recognition
We recognize revenue when a customer obtains control of a promised good or service. The amount of revenue
recognized reflects consideration that we expect to be entitled to receive in exchange for these goods and services,
incentives and taxes collected from customers, that are subsequently remitted to governmental authorities.
Product Revenue
Our products are composed of analyzer instruments, assay kits and other consumables such as reagents.
Products are sold directly to biopharmaceutical and academic research organizations or are sold through distributors in
EMEA and Asia Pacific regions. The sales of instruments are generally accompanied by an initial year of implied
service-type warranties and may be bundled with assays and other consumables and may also include other items such as
training and installation of the instrument and/or an extended service warranty. Revenues from the sale of products are
recognized at a point in time when we transfer control of the product to the customer, which is upon installation for
instruments sold to direct customers, and based upon shipping terms for assay kits and other consumables. Revenue for
instruments sold to distributors is generally recognized based upon shipping terms (either upon shipment or delivery).
Service and Other Revenue
Service revenues are composed of contract research services, initial implied one-year service-type warranties,
extended services contracts and other services such as training. Contract research services are provided through our
Accelerator Laboratory and generally consist of fixed fee contracts. Revenues from contract research services are
73
recognized at a point in time when we complete and deliver our research report on each individually completed study, or
over time if the contractual provisions allow for the collection of transaction consideration for costs incurred plus a
reasonable margin through the period of performance of the services. Revenues from service-type warranties are
recognized ratably over the contract service period. Revenues from other services are immaterial.
Collaboration and License Revenue
We may enter into agreements to license the intellectual property and know-how associated with our
instruments in exchange for license fees and future royalties (as described below). The license agreements provide the
licensee with a right to use the intellectual property with the license fee revenues recognized at a point in time as the
underlying license is considered functional intellectual property. We have recognized revenues from a sales- or usage
based royalties related to our licensing technology and intellectual property.
Payment Terms
Our payment terms vary by the type and location of customer and the products or services offered. Payment
from customers is generally required in a term ranging from 30 to 45 days from date of shipment or satisfaction of the
performance obligation with no discounts for early payment. Occasionally we do provide extended payment terms or
financing arrangements to customers.
Disaggregated Revenue
When disaggregating revenue, we considered all of the economic factors that may affect revenues. The
following tables disaggregate our revenue from contracts with customers based on their location by revenue type:
(in thousands)
Product revenues:
Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumable and other products . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service and other revenues:
Service-type warranties . . . . . . . . . . . . . . . . . . .
Research services . . . . . . . . . . . . . . . . . . . . . . . .
Other services . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collaboration and license revenue:
Collaboration and license revenue . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
$
Year Ended
December 31, 2021
NA
EMEA
Asia Pacific
Total
12,138
34,997
47,135
4,334
12,101
1,372
17,807
360
360
$
$
$
$
$
$
8,178
16,122
24,300
2,039
2,600
695
5,334
288
288
$
$
$
$
$
$
5,657 $
3,970
9,627 $
255 $
124
109
488 $
25,973
55,089
81,062
6,628
14,825
2,176
23,629
— $
— $
648
648
74
(in thousands)
Product revenues:
Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumable and other products . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
$
Service and other revenues:
Service-type warranties . . . . . . . . . . . . . . . . . . .
Research services . . . . . . . . . . . . . . . . . . . . . . . .
Other services . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
$
Collaboration and license revenue:
$
Collaboration and license revenue . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Year Ended
December 31, 2020
NA
EMEA
Asia Pacific
Total
8,680
14,305
22,985
3,171
15,011
700
18,882
11,685
11,685
$
$
$
$
$
$
4,332
10,854
15,186
1,543
2,225
435
4,203
124
124
$
$
$
$
$
$
3,594 $
2,252
5,846 $
207 $
737
100
1,044 $
16,606
27,411
44,017
4,921
17,973
1,235
24,129
— $
— $
11,809
11,809
Our contracts with customers may include promises to transfer multiple products and services to a customer. In
accordance with ASC 606, we combine any performance obligations that are immaterial with one or more other
performance obligations that are material to the contract. For arrangements with multiple performance obligations, we
allocate the contract transaction price, including discounts, to each performance obligation based on its relative
standalone selling price. Judgment is required to determine the standalone selling price for each distinct performance
obligation. We determine standalone selling prices based on prices charged to customers in observable transactions, and
use a range of amounts to estimate standalone selling prices for each performance obligation. We may have more than
one range of standalone selling price for certain products and services based on the pricing for different customer
classes.
Variable consideration in our contracts primarily relates to (i) sales- and usage-based royalties related to the
license of intellectual property in collaboration and license contracts and (ii) certain non-fixed fee research services
contracts. ASC 606 provides for an exception to estimating the variable consideration for sales- and usage-based
royalties related to the license of intellectual property, such that the sales- or usage-based royalty will be recognized in
the period the underlying transaction occurs. We have recorded sales- or usage-based royalty revenue for the years ended
December 31, 2021, 2020 and 2019 related to the intellectual property licensed by Uman. We recognize revenues from
sales- or usage based royalty revenue at the later of when the sales or usage occurs; and the satisfaction or partial
satisfaction of the performance obligation to which the royalty has been allocated.
The aggregate amount of transaction price that is allocated to performance obligations that have not yet been
satisfied or are partially satisfied as of December 31, 2021 is $7.5 million. Of the performance obligations not yet
satisfied or that are partially satisfied, $6.4 million is expected to be recognized as revenue in the next 12 months, with
the remainder to be recognized within the 24 months thereafter. The $7.5 million principally consists of amounts billed
for undelivered services related to initial and extended service-type warranties and research services, as well as
$0.5 million related to undelivered licenses of intellectual property for a diagnostics company.
We have classified the balance of capitalized costs to obtain a contract as a component of prepaid expenses and
other current assets as of December 31, 2021 and classified the expense as a component of cost of goods sold and
selling, general and administrative expense over the estimated life of the contract. We consider potential impairment in
these amounts each period.
ASC 606 provides entities with certain practical expedients and accounting policy elections to minimize the
cost and burden of adoption. We exclude from the transaction price any amounts collected from customers related to
sales and other similar taxes. We have elected to account for the shipping and handling as an activity to fulfill the
75
promise to transfer the product, and therefore will not evaluate whether shipping and handling activities are promised
services to its customers.
When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs
either significantly before or significantly after performance, resulting in a significant financing component. We do not
assess whether a significant financing component exists if the period between when we perform our obligations under
the contract and when the customer pays is one year or less. None of our contracts contained a significant financing
component for the years ended December 31, 2021, 2020, and 2019.
Grant Revenue
We recognize grant revenue as we perform services under the arrangement when the funding is committed.
Revenues and related research and development expenses are presented gross in the consolidated statements of
operations as we have determined we are the primary obligor under the arrangement relative to the research and
development services.
Accounting for grants does not fall under ASC 606, as the grantor will not benefit directly from our expansion
or product development. As there is no authoritative guidance under U.S. GAAP on accounting for grants to for-profit
business entities, we have accounted for grants by analogy to IAS 20.
Our grants contain both monetary amounts granted related to assets and monetary amounts granted related to
income, which are grants other than those related to assets. The grants related to assets are for the expansion and increase
of manufacturing capacity. The grants related to income are for additional research and development, as well as other
non-asset related scale up costs. We determined it was appropriate to account for each monetary grant amount under the
appropriate accounting treatment outlined in IAS 20.
Under IAS 20, grants related to assets shall be presented in the consolidated balance sheets either by
recognizing the grant as deferred income (which is recognized in the consolidated statements of operations on a
systematic basis over the useful life of the asset), or by deducting the grant in calculating the carrying amount of the
asset (which is recognized in the consolidated statements of operations over the life of the depreciable asset as a reduced
depreciation expense). Both methods are acceptable under IAS 20. We have elected to record grants related to assets as a
deduction in calculating the carrying value of the asset.
Under IAS 20, grants related to income are presented as part of the consolidated statements of operations, either
separately or under a general heading. Both methods are acceptable under IAS 20. We have elected to record grants
related to income separately on the consolidated statements of operations as grant revenue. The related expenses are
recorded within operating expenses and not deducted.
On June 22, 2020, we entered into WP1 under the NIH’s RADx program to assess the feasibility of a novel
SARS-CoV-2 antigen detection test using our Simoa technology. During the year ended December 31, 2020 we
recognized $2.0 million of grant revenue and incurred $1.0 million in research and development expense related to WP1.
WP1 was completed as of December 31, 2020.
On September 29, 2020, we entered into WP2 with the NIH under its RADx program. The contract, which has a
total award value of $18.2 million, accelerates the continued development, scale-up, and deployment of the novel
SARS-CoV-2 antigen detection test using our Simoa technology. The contract provides funding to expand assay kit
manufacturing capacity and commercial deployment readiness. Release of the $18.2 million of funding under WP2 is
based on the achievement of certain milestones. Contract funding was subject to achievement of these pre-defined
milestones and the contract period ran through September 2021, with one milestone extended to March 31, 2022. As of
December 31, 2021, we had received $17.7 million out of the full $18.2 million under WP2. During the year ended
December 31, 2021, we recognized $5.2 million in grant revenue and incurred $3.4 million in research and development
expense related to WP2. During the year ended December 31, 2020, we recognized $4.4 million in grant revenue and
incurred $2.6 million in research and development expense related to WP2.
76
The following table summarizes the cumulative activity under WP2 as of December 31, 2021 and 2020 (in
thousands):
Total grant revenue from research and development activities . . . . . . .
Total proceeds used for assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred proceeds for assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred grant revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total amount accrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total cash received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total proceeds received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total proceeds reasonably assured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total WP2 grant amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
$
Stock-Based Compensation
December 31, 2021
December 31, 2020
9,576 $
8,104
—
—
17,680 $
17,680 $
—
17,680 $
17,680 $
520
18,200 $
4,362
826
2,478
304
7,970
7,970
(2,968)
5,002
5,002
13,198
18,200
We account for stock-based compensation awards in accordance with ASC 718, Compensation—Stock
Compensation (ASC 718). ASC 718 requires all stock-based payments to employees, including grants of employee stock
options, to be recognized in the statement of operations based on their fair values. Stock-based compensation awards
have historically consisted of stock options and restricted stock units. Prior to the adoption of Accounting Standards
Update (ASU) No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-
Based Payment Accounting (ASU 2018-07), the measurement date for non-employee awards was generally the date the
services were completed, resulting in financial reporting period adjustments to stock-based compensation during the
vesting period for changes in the fair value of the awards. We adopted ASU 2018-07 on January 1, 2020. After the
adoption of ASU 2018-07, the measurement date for non-employee awards is the date of grant without changes in the
fair value of the award. Stock-based compensation costs for non-employees are recognized as expense over the vesting
period on a straight-line basis. There were no material non-employee awards outstanding during the years ended
December 31, 2021, 2020, and 2019.
We recognize forfeitures as they occur. We estimate the grant date fair value, and the resulting stock-based
compensation expense, using a Black-Scholes option-pricing model. The grant date fair value of the stock-based awards
is generally recognized on a straight-line basis over the requisite service period, which is generally the vesting period of
the respective awards.
The fair value of stock options granted to employees and non-employees is estimated on the grant date using a
Black-Scholes option-pricing model, based on the assumptions noted in the following table:
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average grant date fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2020
2021
0.4% - 1.7%
0.4% - 1.3%
None
None
6.0
6.0
49.2% - 55.6% 43.9% - 49.2%
$ 29.96
$ 12.66
Expected volatility was calculated based on proportional weighting of reported volatility data for a
representative group of guideline publicly traded companies for which historical information was available, as well as
our stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant,
commensurate with the expected life assumption. We estimate the expected life of options granted to employees utilizing
the simplified method which calculates the expected life of an option as the average of the time to vesting and
77
contractual life of the options. The expected life is applied to the stock option grant group as a whole, as we do not
expect substantially different exercise or post-vesting termination behavior among our employee population. We use the
simplified method due to the lack of historical exercise data and the plain nature of the stock options. We use the
remaining contractual term for the expected life of non-employee awards. The expected dividend yield is assumed to be
zero as we have never paid dividends and have no current plans to pay any dividends on common stock.
We determined the fair value of each share of common stock underlying share-based awards based on the
closing price of our common stock as reported by Nasdaq on the date of grant.
The table below summarizes the stock-based compensation expense recognized in our statements of operations
by classification (in thousands):
Cost of product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of service and other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
471 $
403
1,807
13,294
15,975 $
189
311
1,129
8,470
10,099
As of December 31, 2021, we had $35.8 million of total unrecognized stock-based compensation costs which
we expect to recognize over a weighted-average period of 2.9 years.
Year Ended December 31,
2020
2021
Results of Operations
Comparison of the Years Ended December 31, 2021 and December 31, 2020 (dollars in thousands):
2021
Year Ended December 31,
2020
Increase (Decrease)
34,149
14,679
Product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81,062
23,629
Service and other revenue . . . . . . . . . . . . . . . . . . . .
648
Collaboration and license revenue . . . . . . . . . . . . .
5,217
Grant revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
110,556
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold:
Cost of product revenue . . . . . . . . . . . . . . . . . . . . .
Cost of service revenue . . . . . . . . . . . . . . . . . . . . . .
Cost of collaboration and license revenue . . . . . . .
Total costs of goods sold, services, and licenses. .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses:
Research and development . . . . . . . . . . . . . . . . . . .
Selling, general, and administrative . . . . . . . . . . . .
Total operating expenses . . . . . . . . . . . . . . . . . . . .
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net . . . . . . . . . . . . . . . . . .
Loss before income taxes . . . . . . . . . . . . . . . . . . . .
Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (57,688)
27,978
92,336
120,314
(58,586)
48,828
61,728
— — %
31 %
13 %
44 %
56 %
25 %
84 %
109 %
(53)%
(403) — %
1 %
1,265
(52)%
(57,724)
36 — %
% of
revenue
73 % $ 44,017
24,129
21 %
11,809
1 %
6,422
5 %
86,377
100 %
% of
revenue Amount
52 % $ 37,045
28 %
(500)
14 % (11,161)
(1,205)
6 %
100 % 24,179
%
84 %
(2)%
(95)%
(19)%
28 %
25,950
11,245
1,000
38,195
48,182
20,174
59,592
79,766
(31,584)
(273)
(31,906)
8,199
30 %
3,434
13 %
1 %
(1,000)
44 % 10,633
56 % 13,546
23 %
7,804
69 % 32,744
92 % 40,548
(37)% (27,002)
(130)
(0)%
1,314
(37)% (25,818)
(340)
(37)% $ (26,158)
(49) — %
376 — %
32 %
31 %
(100)%
28 %
28 %
39 %
55 %
51 %
(85)%
(48)%
2,682 %
(81)%
(90)%
(83)%
(52)% $ (31,530)
78
Revenue
Revenue increased by $24.2 million, or 28%, to $110.6 million for the year ended December 31, 2021 as
compared to $86.4 million for the year ended December 31, 2020. Product revenue increased 84% to $81.1 million for
the year ended December 31, 2021, as compared to $44.0 million in the same period in 2020. Product revenue consisted
of sales of instruments totaling $26.0 million and sales of consumables and other products totaling $55.1 million for the
year ended December 31, 2021. Product revenue consisted of sales of instruments totaling $16.6 million and sales of
consumables and other products of $27.4 million for the year ended December 31, 2020. The increase in product revenue
was primarily due to the increased ability to install instruments as customer sites reopened from COVID-19 related
shutdowns that impacted results in the same period in 2020. In addition, as the installed base of instruments increased
year over year, consumable sales increased. The decrease in service and other revenue of $0.5 million was primarily due
to our open headcount within our services personnel. We had $0.6 million and $11.8 million in collaboration and license
revenue during the year ended December 31, 2021 and 2020, respectively, related to licensing technology and
intellectual property. We had $11.2 million in collaboration and license revenue during the year ended December 31,
2020, primarily related to entering into the Abbott License Agreement. Grant revenue of $5.2 million and $6.4 million
consisted of revenue related to WP2 recognized during the year ended December 31, 2021, and revenue related to WP2
and WP1 recognized during the year ended December 31, 2020, respectively.
Cost of Goods Sold, Services, and Licenses
Cost of product revenue increased by $8.2 million, or 32%, to $34.1 million for the year ended December 31,
2021 as compared to $26.0 million for the year ended December 31, 2020. The increase was primarily due to our
increase in volume of our product revenue. Cost of service revenue increased by $3.4 million, or 31%, to $14.7 million
for the year ended December 31, 2021, as compared to $11.2 million for the year ended December 31, 2020, primarily
due to increased personnel costs from the build out of our field service organization. Cost of collaboration and license
revenue of $1.0 million for the year ended December 31, 2020 resulted from the licensing of certain technology and
intellectual property to Abbott. Overall cost of goods sold and services as a percentage of revenue was consistent at 44%
of total revenue for the years ended December 31, 2021 and 2020, respectively.
Research and Development Expense
Research and development expense increased by $7.8 million, or 39%, to $28.0 million for the year ended
December 31, 2021, as compared to $20.2 million for the year ended December 31, 2020. The increase was primarily
due to increased headcount as we build our organization to support growth and invest in process improvements.
Selling, General and Administrative Expense
Selling, general and administrative expense increased by $32.7 million, or 55%, to $92.3 million for the year
ended December 31, 2021 as compared to $59.6 million for the year ended December 31, 2020. The increase was
primarily due to higher personnel costs from increased headcount and other spending increases in various departments as
we build out our organization to support growth and invest in process improvements.
Interest Expense
Interest expense, net decreased by $0.1 million for the year ended December 31, 2021 as compared to the same
period in 2020, primarily due to the unfavorable impact of interest rates on our cash equivalents for the year ended
December 31, 2021, as compared to the year ended December 31, 2020.
Other Income (Expense), Net
Other income (expense), net increased by $1.3 million for the year ended December 31, 2021 as compared to
the same period in 2020, primarily due to other income of $2.1 million related to an employee retention tax credit
established under the Coronavirus Aid, Relief and Economic Securities Act, offset by other expense due to unfavorable
foreign currency exchange rates during the year ended December 31, 2021.
79
Income Tax Benefit
Income tax benefit was less than $0.1 million for the year ended December 31, 2021, as compared to
$0.4 million tax for the same period in 2020. The change is primarily due to the decrease in the tax benefit recorded on
the operating results of our foreign subsidiaries.
Liquidity and Capital Resources
Since our inception, we have incurred annual net losses and negative cash flows from operations. We used
$47.9 million, $23.4 million and $26.2 million of cash for our operating activities for the years ended December 31,
2021, 2020, and 2019, respectively. The significant increase in our cash used for operating activities for the year ended
December 31, 2021, as compared to December 31, 2020, was principally driven by our increased net loss for the 2021
period. As of December 31, 2021, we had an accumulated deficit of $305.5 million. As of December 2021, we had cash
and cash equivalents of $396.5 million.
Sources of Liquidity
To date, we have financed our operations principally through equity offerings, borrowings from credit facilities
and revenue from our commercial operations.
Equity Offerings
On March 19, 2019, we entered into a Sales Agreement for an “at-the-market offering” arrangement with
Cowen and Company, LLC (Cowen), which allowed us to issue and sell shares of common stock pursuant to a shelf
registration statement for total gross sales proceeds of up to $50.0 million from time to time through Cowen, acting as
our agent. During the year ended December 31, 2019, we sold an aggregate of 2,186,163 shares of common stock
pursuant to this agreement resulting in $49.7 million in gross proceeds and $48.0 million in net proceeds. On August 6,
2020, we delivered written notice to Cowen to terminate the Sales Agreement, which termination the parties agreed to
make immediately effective.
On August 8, 2019, we entered into an underwriting agreement with J.P. Morgan Securities LLC and SVB
Leerink LLC, or Leerink, as representatives of the several underwriters, relating to an underwritten public offering of
2,732,673 shares of common stock at a public offering price of $25.25 per share. We received $69.0 million in gross
proceeds and $64.5 million in net proceeds.
On August 6, 2020, we entered into an underwriting agreement with Leerink and Cowen, as representatives of
the several underwriters, relating to an underwritten public offering of 3,048,774 shares of common stock at a public
offering price of $32.00 per share. We received $97.6 million in gross proceeds and $91.4 million in net proceeds.
On February 3, 2021, we entered into an underwriting agreement with Goldman Sachs & Co. LLC, Leerink and
Cowen, as representatives of the several underwriters, relating to an underwritten public offering of 4,107,142 shares of
common stock at a public offering price of $70.00 per share. We received $287.5 million in gross proceeds and
approximately $269.7 million in net proceeds.
Loan Facility with Hercules
On April 14, 2014, we executed a loan agreement with Hercules Capital, Inc. (Hercules), as subsequently
amended most recently in April 2019. The interest rate on this term loan was variable based on a calculation of 8% plus
the prime rate less 5.25%, with a minimum interest rate of 8%. Interest was to be paid monthly beginning the month
following the borrowing date. Under the amended agreement, we were required to pay the loan principal in four equal
installments starting July 1, 2021, with the final principal payment and end of term charge to be made on October 1,
2021. On October 1, 2021, we made the final principal payment, including end of term fees, of $2.0 million related to the
loan agreement. As of December 31, 2021, there were no additional amounts available to borrow under the loan facility.
80
Uman Acquisition
In August 2019, we completed the acquisition of Uman, in which we paid $15.7 million in cash to the
shareholders of Uman. We funded this payment through our existing cash balances. In addition, we issued $5.5 million
in stock in connection with the purchase of Uman. The acquisition closed with respect to 95% of the outstanding shares
of capital stock of Uman on July 1, 2019 and with respect to the remaining 5% of the outstanding shares of capital stock
of Uman on August 1, 2019.
Cash Flows
The following table presents our cash flows for each period presented (in thousands):
Net cash used in operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
Net Cash Used in Operating Activities
Year Ended December 31,
2021
2020
(47,907) $
(6,338)
270,795
216,550 $
(23,365)
(626)
96,236
72,245
We derive cash flows from operations primarily from the sale of our products and services. Our cash flows
from operating activities are also significantly influenced by our use of cash for operating expenses to support the
growth of our business. We have historically experienced negative cash flows from operating activities as we have
developed our technology, expanded our business and built our infrastructure and this may continue in the future.
Net cash used in operating activities was $47.9 million during the year ended December 31, 2021. Net cash
used in operating activities primarily consisted of net loss of $57.7 million offset by non-cash charges of $16.0 million of
stock-based compensation expense and $4.9 million of depreciation and amortization expense. Cash used as a result of
changes in operating assets and liabilities of $12.2 million was primarily due to an increase in inventory of $8.1 million
and an increase in accounts receivable of $6.9 million, offset by an increase in accounts payable, accrued compensation
and benefits and other accrued expenses of $3.5 million, all driven by growth and our investments in process
improvements.
Net cash used in operating activities was $23.4 million during the year ended December 31, 2020. Net cash
used in operating activities primarily consisted of net loss of $31.5 million offset by non-cash charges of $10.1 million of
stock-based compensation expense and $4.3 million of depreciation and amortization expense. Cash used as a result of
changes in operating assets and liabilities of $8.0 million was primarily due to an increase in an increase in accounts
receivable of $6.7 million, an increase in inventory of $5.1 million, and an increase in prepaid expenses and other assets
of $3.9 million, offset by a decrease in accrued compensation and benefits and other accrued expenses of $6.2 million.
Net Cash Used in Investing Activities
Historically, our primary investing activities have consisted of capital expenditures for the purchase of capital
equipment to support our expanding infrastructure and work force. We expect to continue to incur additional costs for
capital expenditures related to these efforts in future periods.
We used $6.3 million of cash during the year ended December 31, 2021, consisting of $13.6 million for the
purchase of property and equipment, offset by $7.3 million in grant proceeds related to assets acquired under WP2.
We used $0.6 million of cash in investing activities during the year ended December 31, 2020, consisting of
$3.9 million in additions to property and equipment, offset by $3.3 million in grant proceeds related to assets acquired
under WP2.
81
Net Cash Provided by Financing Activities
Historically, we have financed our operations principally through private placements of our convertible
preferred stock and borrowings from credit facilities, the sale of shares of our common stock in our IPO or other
offerings and revenues from our commercial operations.
Financing activities provided $270.8 million of cash during the year ended December 31, 2021, primarily from
$269.7 million in net proceeds from our underwritten public offering during the first quarter of 2021.
Financing activities provided $96.2 million of cash during the year ended December 31, 2020, primarily from
net proceeds of our underwritten public offering during the third quarter of 2020.
Capital Resources
We have not achieved profitability on an annual basis since our inception, and we expect to continue to incur
net losses in the future. We also expect that our operating expenses will increase as we continue to increase our
marketing efforts to drive adoption of our commercial products. Our liquidity requirements have historically consisted,
and we expect that they will continue to consist, of sales and marketing expenses, research and development expenses,
working capital, debt service and general corporate expenses.
We believe cash generated from commercial sales along with our current cash and cash equivalents will be
sufficient to meet our anticipated operating cash requirements for at least the next 12 months. In the future, we expect
our operating and capital expenditures to increase as we increase headcount, expand our sales and marketing activities
and grow our customer base. Our estimates of the period of time through which our financial resources will be adequate
to support our operations and the costs to support research and development and our sales and marketing activities are
forward-looking statements and involve risks and uncertainties and actual results could vary materially and negatively as
a result of a number of factors, including the factors discussed in Item 1A, “Risk Factors” of this Annual Report on
Form 10-K. We have based our estimates on assumptions that may prove to be wrong and we could utilize our available
capital resources sooner than we currently expect. Our future funding requirements will depend on many factors,
including:
• market acceptance of our products and services;
•
•
•
•
the cost and timing of establishing additional sales, marketing and distribution capabilities;
the cost of our research and development activities;
our ability to enter into collaborations in the future, and the success of any such collaborations;
the cost and timing of potential regulatory clearances or approvals that may be required in the future for our
products; and
the effect of competing technological and market developments.
•
We cannot assure you that we will be able to obtain additional funds on acceptable terms, or at all. If we raise
additional funds by issuing equity or equity-linked securities, our stockholders may experience dilution. Future debt
financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any debt
or equity financing that we raise may contain terms that are not favorable to us or our stockholders. If we raise additional
funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish some rights
to our technologies or our products, or grant licenses on terms that are not favorable to us. If we do not have or are not
able to obtain sufficient funds, we may have to delay development or commercialization of our products. We also may
have to reduce marketing, customer support or other resources devoted to our products or cease operations.
If the conditions for raising capital are favorable, we may seek to finance future cash needs through public or
private equity or debt offerings or other financings. On November 6, 2020, we filed an automatically effective shelf
registration statement with the SEC. Each issuance of securities under the shelf registration statement will require the
filing of a prospectus supplement identifying the amount and terms of securities to be issued. The registration statement
does not limit the amount of securities that may be issued thereunder. Our ability to issue securities is subject to market
82
conditions and other factors. This registration statement will expire on November 6, 2023, three years after its date of
effectiveness.
Contractual Obligations, Commitments and Contingencies
Lease Obligations
We currently lease approximately 91,600 square feet of office, laboratory, and manufacturing space at our
headquarters in Billerica, Massachusetts. In addition, in the first quarter of 2022, we executed a lease for 85,800 square
feet of office and laboratory space in Bedford, Massachusetts. The premises covered by these leases serves as our
principal office and laboratory space effective the second quarter of 2019. The initial term of the Billerica lease is
eleven years and five months beginning on April 1, 2019, and we have the option to extend the lease for two additional
five-year periods. The initial term of the Bedford lease is eight years and nine months beginning on the earlier of our
occupancy, or May 1, 2022.
In addition, our subsidiary, Uman, leases a total of approximately 6,500 square feet of office, laboratory,
manufacturing and storage space in Umeå, Sweden. These leases expire at various dates through February 28, 2023.
The following table summarizes our operating lease obligations (in thousands):
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
As of December 31, 2021
3,466
3,515
3,557
3,655
3,765
14,782
32,740
Backlog
We generally expect to ship all instrument and consumable orders received in a given period with the exception
of orders received near the end of a fiscal quarter; and as a result, our backlog at the end of any period is typically
insignificant.
83
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to financial market risk, including foreign currency exchange risk and interest rate risk.
Concentration of Revenue and Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and
cash equivalents and trade receivables. Cash equivalents consist primarily of cash deposits and short-term, highly liquid
investments that are readily convertible into cash, with original maturities of three months or less. Cash equivalents
consist primarily of bank deposits and certain investments, such as government securities, with maturities less than 90
days at the date of purchase. Deposits of cash held outside the United States totaled approximately $3.4 million and
$1.1 million at December 31, 2021 and 2020, respectively.
We grant credit to customers in the ordinary course of business. Credit evaluations are performed on an
ongoing basis to reduce credit risk, and no collateral is required from our customers. An allowance for credit loss is
provided for those accounts receivable considered to be uncollectible based upon historical experience and credit
evaluation. As of December 31, 2021, one company represented 18% of our gross accounts receivable. As of
December 31, 2020, one company represented 19% of our gross accounts receivable. Due to the nature of our quarterly
revenue streams derived from royalty revenue, it is not unusual for our accounts receivable balances to include a few
customers with large balances. Historically, we have not recorded material losses due to customers’ nonpayment. For the
years ended December 31, 2021 and 2019, no customer individually accounted for more than 10% of our total revenue.
For the year ended December 31, 2020, one company accounted for 13% of our total revenue. For the quarter ended
December 31, 2021, one company accounted for 14% of our total revenue.
Foreign Currency Exchange Risk
As we expand internationally our results of operations and cash flows will become increasingly subject to
fluctuations due to changes in foreign currency exchange rates. Historically, the substantial majority of our revenue has
been denominated in U.S. dollars. For the years ended December 31, 2021, 2020, and 2019, approximately 36%, 31%
and 41%, respectively, of our total revenue was generated from customers located outside of North America. Our
expenses are generally denominated in the currencies in which our operations are located, which is primarily in the
United States, with a portion of expenses incurred in Canada, Europe, Japan and China. Our results of operations and
cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates. Fluctuations in
currency exchange rates could harm our business in the future. The effect of a 10% adverse change in exchange rates on
foreign denominated cash, receivables and payables as of December 31, 2021 would not have been material. The effect
of a 10% adverse change in exchange rates on foreign denominated cash, receivables and payables as of December 31,
2022 would not be material.
To date, we have not entered into any material foreign currency hedging contracts although we may do so in the
future.
Interest Rate Risk
We had cash and cash equivalents of $396.5 million as of December 31, 2021. These amounts were held
primarily in cash on deposit with banks. Due to the short-term nature of these investments, we believe that we do not
have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates.
Declines in interest rates, however, will reduce future investment income. If overall interest rates had decreased by 10%
during the periods presented, our interest income would not have been materially affected. If overall interest rates
decrease by 10% during the year ending December 31, 2022, our interest income would not be materially affected. We
do not hold or issue financial instruments for trading purposes.
84
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on
Form 10-K beginning on page F-1.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
Item 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We have established disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act that are designed to provide reasonable assurance that information required to be
disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the SEC and to ensure that such information is accumulated
and communicated to management, including our Chief Executive Officer (principal executive officer) and Chief
Financial Officer (principal financial officer), to allow timely decisions regarding required disclosures. Under the
supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial
Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of December 31,
2021. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were effective at a reasonable assurance level as of December 31, 2021.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as this term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement preparation and presentation.
Under the supervision and with the participation of our management, including our Chief Executive Officer and
Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting
as of December 31, 2021 based on the framework set forth in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on our evaluation
under the framework set forth in Internal Control-Integrated Framework, our management concluded that our internal
control over financial reporting was effective at the reasonable assurance level as of December 31, 2021.
The Company’s independent registered public accounting firm, Ernst & Young LLP, has also issued an audit
report on the Company’s internal controls over financial reporting, which is included elsewhere in this Annual Report on
Form 10-K.
Changes in Internal Control over Financial Reporting
An evaluation was also performed under the supervision and with the participation of our management,
including the principal executive officer and principal financial officer, of any change in our internal controls over
financial reporting that occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to
affect, our internal controls over financial reporting.
There has been no change in our internal controls over financial reporting during the fiscal quarter ended
December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal controls over
financial reporting.
85
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Quanterix Corporation
Opinion on Internal Control over Financial Reporting
We have audited Quanterix Corporation’s internal control over financial reporting as of December 31, 2021, based on
criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Quanterix Corporation (the Company)
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on
the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of Quanterix Corporation as of December 31, 2021 and 2020, the related
consolidated statements of operations, comprehensive loss, cash flows and stockholders’ equity for each of the three years
in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item
15(2) and our report dated March 1, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s
Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained
in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Boston, Massachusetts
March 1, 2022
Item 9B. OTHER INFORMATION
Not applicable.
86
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this Item 10 will be included in our definitive proxy statement to be filed with the
SEC with respect to our 2022 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION
The information required by this Item 11 will be included in our definitive proxy statement to be filed with the
SEC with respect to our 2022 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this Item 12 will be included in our definitive proxy statement to be filed with the
SEC with respect to our 2022 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by this Item 13 will be included in our definitive proxy statement to be filed with the
SEC with respect to our 2022 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item 14 will be included in our definitive proxy statement to be filed with the
SEC with respect to our 2022 Annual Meeting of Stockholders and is incorporated herein by reference.
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(1)
Financial Statements
PART IV
The consolidated financial statements are included beginning on page F-1 attached hereto and are filed as part
of this Annual Report on Form 10-K.
87
(2)
Financial Statement Schedules
Schedule II – Valuations and Qualifying Accounts
Description
Balance at
Beginning of Period
(in thousands)
Charged
to Costs and Expenses
(in thousands)
Deductions
(in thousands)
Balance at
End of Period
(in thousands)
Allowance for credit losses:
Year ended December 31, 2021 . . . . $
Year ended December 31, 2020 . . . . $
Year ended December 31, 2019 . . . . $
(3)
Exhibits
370
162
36
$
$
$
213
493
160
$
$
$
(164) $
(285) $
(34) $
419
370
162
The following is a list of exhibits filed as part of this Annual Report on Form 10-K:
Exhibit Number
Exhibit Description
Filed
Herewith
Incorporated by
Reference herein from
Form or Schedule
3.1 Amended and Restated
Certificate of Incorporation
3.2 Restated Bylaws
4.1 Description of Securities
4.2 Form of Common Stock
Certificate
4.3 Fourth Amended and
Restated Registration Rights
Agreement, dated as of
June 2, 2017, by and among
the Registrant and the
investors named therein
10.1.1+ 2007 Stock Option and Grant
Plan, as amended
10.1.2+ Form of Incentive Stock
Option Agreement under the
2007 Stock Option and Grant
Plan, as amended
10.1.3+ Form of Non-qualified Stock
Option Agreement under the
2007 Stock Option and Grant
Plan, as amended
10.1.4+ Form of Restricted Stock
Agreement under the 2007
Stock Option and Grant Plan,
as amended
8-K
8-K
10-K
S-1
S-1
S-1
S-1
Filing Date
SEC File/
Reg. Number
12/15/2017
001-38319
12/15/2017
3/13/2020
11/9/2017
001-38319
001-38319
333-221475
11/9/2017
333-221475
11/9/2017
333-221475
11/9/2017
333-221475
S-1
11/9/2017
333-221475
S-1
11/9/2017
333-221475
10.2.1+ 2017 Employee, Director and
S-1/A
11/27/2017
333-221475
Consultant Equity Incentive
Plan
88
Exhibit Number
Exhibit Description
Filed
Herewith
Incorporated by
Reference herein from
Form or Schedule
Filing Date
SEC File/
Reg. Number
10.2.2+ Form of Stock Option
S-1/A
11/27/2017
333-221475
Agreement under the 2017
Employee, Director and
Consultant Equity Incentive
Plan
10.2.3+ Form of Restricted Stock
S-1/A
11/27/2017
333-221475
Agreement under the 2017
Employee, Director and
Consultant Equity Incentive
Plan
10.2.4+ Form of Restricted Stock Unit
S-1/A
11/27/2017
333-221475
Agreement under the 2017
Employee, Director and
Consultant Equity Incentive
Plan
10.3+ Employment Agreement,
dated January 1, 2015, by and
between the Registrant and E.
Kevin Hrusovsky
10.4+ Employment Agreement,
dated June 22, 2021, between
the Registrant and Michael
Doyle
S-1
11/9/2017
333-221475
8-K
6/28/2021
001-38319
10.5+ Employment Agreement,
8-K
5/11/2021
001-38319
dated May 10, 2021, between
the Registrant and
Dr. Masoud Toloue
10.6+ Letter Agreement, dated
10-Q
8/6/2019
001-38319
May 31, 2019, by and
between the Registrant and
John Fry
10.7+ Letter Agreement, dated
August 8, 2014, by and
between the Registrant and
Mark T. Roskey, Ph.D.
10.8+ Letter Agreement, effective
as February 5, 2018, by and
between the Registrant and
Dawn Mattoon
10.9.1* Exclusive License
Agreement, dated June 18,
2007, between the Registrant
and Tufts University, as
amended on April 29, 2013
10.9.2* Second Amendment, dated
August 22, 2017, to the
Exclusive License Agreement
between the Registrant and
Tufts University
89
S-1
11/9/2017
333-221475
10-Q
5/15/2018
001-38319
S-1
11/9/2017
333-221475
S-1
11/9/2017
333-221475
Filed
Herewith
Incorporated by
Reference herein from
Form or Schedule
10-Q
Filing Date
11/6/2020
SEC File/
Reg. Number
001-38319
S-1
11/9/2017
333-221475
S-1
11/9/2017
333-221475
S-1
11/9/2017
333-221475
Exhibit Number
Exhibit Description
10.9.3@Third Amendment, dated
September 25, 2020, to the
Exclusive License Agreement
between the Registrant and
Tufts University
10.10.1* Supply and Manufacturing
Agreement, dated
September 14, 2011, between
the Registrant and STRATEC
Biomedical AG
10.10.2 First Amendment to Supply
and Manufacturing
Agreement, dated October 17,
2013, between the Registrant
and STRATEC
Biomedical AG
10.11.1* STRATEC Development
Services and Equity
Participation Agreement,
dated August 15, 2011,
between the Registrant and
STRATEC Biomedical
Systems AG
10.11.2* First Amendment to
S-1
11/9/2017
333-221475
STRATEC Development
Services and Equity
Participation Agreement and
Second Amendment to
Supply and Manufacturing
Agreement, dated
November 18, 2016, between
the Registrant and STRATEC
Biomedical AG
10.12* Manufacturing Services
Agreement, dated
November 23, 2016, between
the Registrant and Paramit
Corporation
S-1
11/9/2017
333-221475
10.13+ Form of Indemnification
S-1/A
11/27/2017
333-221475
Agreement
10.14 Lease Agreement by and
8-K
10/5/2018
001-38319
between SSI 900 Middlesex
MA LP and the Registrant,
dated October 2, 2018.
10.15 Lease Agreement by and
8-K
1/31/2022
001-38319
between the Registrant and
XChange Owner LLC, dated
January 28, 2022.
90
Exhibit Number
Exhibit Description
10.16@Non-Exclusive License
Agreement, dated
September 29, 2020, by and
between Abbott Laboratories
and the Registrant.
10.17+ Separation Agreement dated
November 11, 2021 by and
between the Registrant and
William Geist.
Filed
Herewith
Incorporated by
Reference herein from
Form or Schedule
8-K
Filing Date
10/5/2020
SEC File/
Reg. Number
001-38319
8-K
11/12/2021
001-38319
10-K
3/5/2021
001-38319
10.18+ Amended and Restated 2018
X
Non-Employee Director
Compensation Policy
21.1 Subsidiaries of Registrant
23.1 Consent of Ernst & Young
LLP
31.1 Certification of the Principal
Executive Officer pursuant to
Section 302 of the
Sarbanes-Oxley Act of 2002
31.2 Certification of the Principal
Financial Officer pursuant to
Section 302 of the
Sarbanes-Oxley Act of 2002
X
X
X
32.1 Certifications of the Chief
X
Executive Officer and Chief
Financial Officer pursuant to
Section 906 of the
Sarbanes-Oxley Act of 2002.
101.INS Inline XBRL Instance
Document.
101.SCH Inline XBRL Taxonomy
X
X
Extension Schema Document.
101.CAL Inline XBRL Taxonomy
X
Extension Calculation
Linkbase Document.
101.DEF Inline XBRL Taxonomy
X
Extension Definition.
101.LAB Inline XBRL Taxonomy
X
Extension Label Linkbase
Document.
101.PRE Inline XBRL Taxonomy
X
Presentation Linkbase
Document.
104 Cover Page Interactive Data
File (formatted as Inline
XBRL and contained in
Exhibit 101)
91
+
*
@
Management contract or compensatory plan or arrangement.
Confidential treatment has been granted for portions of this Exhibit. Redacted portions have been filed
separately with the SEC.
Certain confidential portions of this exhibit have been omitted and replaced with “[***]”. Such identified
information has been excluded from this exhibit because it is (i) not material and (ii) would likely cause
competitive harm to the company if disclosed.
Item 16. FORM 10-K SUMMARY
Not applicable.
92
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
QUANTERIX CORPORATION
Date: March 1, 2022
By:
/s/ E. KEVIN HRUSOVSKY
E. Kevin Hrusovsky
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ E. KEVIN HRUSOVSKY
E. Kevin Hrusovsky
Chairman and Chief Executive Officer
and Director (principal executive
officer)
/s/ MICHAEL A. DOYLE
Michael A. Doyle
Chief Financial Officer
(principal financial officer and
principal accounting officer)
/s/ KEITH L. CRANDELL
Keith L. Crandell
/s/ SARAH E. HLAVINKA
Sarah E. Hlavinka
Director
Director
/s/ MARTIN D. MADAUS, PH.D.
Martin D. Madaus, Ph. D.
Director
/s/ PAUL M. MEISTER
Paul M. Meister
/s/ LAURIE J. OLSON
Laurie J. Olson
/s/ DAVID R. WALT, PH.D.
David R. Walt, Ph.D.
Director
Director
Director
March 1, 2022
March 1, 2022
March 1, 2022
March 1, 2022
March 1, 2022
March 1, 2022
March 1, 2022
March 1, 2022
93
(This page has been left blank intentionally.)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
QUANTERIX CORPORATION
Years ended December 31, 2021, 2020, and 2019
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42). . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Stockholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
F-2
F-4
F-5
F-6
F-7
F-8
F-9
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of Quanterix Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Quanterix Corporation (the Company) as of
December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, cash flows and
stockholders' equity for each of the three years in the period ended December 31, 2021, and the related notes and financial
statement schedule listed in the Index at Item 15(2) (collectively referred to as the “consolidated financial statements”). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework), and our report dated March 1, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a
test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex
judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a
separate opinion on the critical audit matter or on the account or disclosure to which it relates.
Excess Inventory
Description of
the Matter
As discussed in Note 2 to the consolidated financial statements, the Company analyzes its
inventory levels at each reporting date to identify inventory that is in excess of expected future
demand. In the event that the Company identifies excess inventory, the Company recognizes a
reduction in the carrying value of inventory.
Auditing management’s valuation of inventory involved judgement in evaluating management’s
analysis and significant assumptions related to projections of future demand which is dependent
on market factors.
F-2
How We
Addressed the
Matter in Our
Audit
To audit the Company’s valuation of inventory, we performed audit procedures that included,
among others, performing inquiries of management and testing the completeness and accuracy of
the underlying data used in the estimation of future demand. To evaluate the Company’s estimate
of future demand, we independently assessed the sensitivity and impact of reasonably possible
changes in forecasted demand and the impact on the Company’s calculation of excess inventory.
We also evaluated management's ability to accurately forecast demand by comparing actual
demand to management's prior estimates.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2008.
Boston, Massachusetts
March 1, 2022
F-3
Quanterix Corporation
Consolidated Balance Sheets
(amounts in thousands, except share and per share data)
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable (less allowance for credit losses of $419 and $370 as of
December 31, 2021 and December 31, 2020, respectively; including $200
and $172 due from related parties as of December 31, 2021 and
December 31, 2020, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable (including $42 and $14 to related parties as of
December 31, 2021 and December 31, 2020, respectively). . . . . . . . . . . . . . . .
Accrued compensation and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued expenses (including $0 and $1,377 to related parties as of
December 31, 2021 and December 31, 2020, respectively). . . . . . . . . . . . . . . .
Deferred revenue (including $54 and $90 with related parties as of
December 31, 2021 and December 31, 2020, respectively). . . . . . . . . . . . . . . .
Current portion of long term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short term lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long term lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $0.001 par value:
Authorized—120,000,000 shares as of December 31, 2021 and
December 31, 2020; issued and outstanding — 36,768,035 and
31,796,544 shares as of December 31, 2021 and December 31, 2020,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
See accompanying notes.
December 31, 2021
December 31, 2020
$
396,465 $
181,584
23,786
22,190
6,514
448,955
2,577
17,960
10,534
9,632
11,491
378
501,527 $
9,209 $
13,252
6,486
6,361
—
1,428
241
36,977
1,099
20,464
2,035
60,575
17,184
14,856
5,981
219,605
1,000
13,912
13,716
10,460
11,995
357
271,045
6,799
10,777
4,845
5,421
7,673
1,234
3,054
39,803
577
21,891
2,649
64,920
37
745,936
441
(305,462)
440,952
501,527 $
32
451,433
2,434
(247,774)
206,125
271,045
$
$
$
F-4
Quanterix Corporation
Consolidated Statements of Operations
(amounts in thousands, except share and per share data)
Product revenue (including related party activity of $505, $580, and $720 for the
years ended December 31, 2021, 2020, and 2019, respectively). . . . . . . . . . . . . . .
Service and other revenue (including related party activity of $114, $202, and
$118 for the years ended December 31, 2021, 2020, and 2019, respectively) . . . . .
Collaboration revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Grant revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Costs of goods sold:
Cost of product revenue (including related party activity of $1,936, $205, and
$234 for the years ended December 31, 2021, 2020, and 2019, respectively). . . .
Cost of service and other revenue (including related party activity of $74, $52,
and $0 for the years ended December 31, 2021, 2020, and 2019, respectively) . .
Cost of collaboration and license revenue (including related party activity of $0,
$1,000, and $0 for the years ended December 31, 2021, 2020, and 2019,
respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total costs of goods sold, services, and licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses:
Research and development (including related party activity of $565, $235, and
$152 for the years ended December 31, 2021, 2020, and 2019, respectively). . . .
Selling, general and administrative (including related party activity of $89, $37,
and $180 for the years ended December 31, 2021, 2020, and 2019,
respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest (expense) income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss per share, basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended
December 31,
2020
2021
2019
$
81,062
$
44,017 $
23,629
648
5,217
110,556
34,149
14,679
—
48,828
61,728
24,129
11,809
6,422
86,377
25,950
11,245
1,000
38,195
48,182
40,491
16,059
184
—
56,734
20,900
8,998
—
29,898
26,836
27,978
20,174
16,190
92,336
120,314
(58,586)
(403)
1,265
(57,724)
36
(57,688) $
(1.60) $
$
$
59,592
79,766
(31,584)
(273)
(49)
(31,906)
376
(31,530) $
(1.07) $
52,246
68,436
(41,600)
627
(10)
(40,983)
187
(40,796)
(1.63)
25,090,708
Weighted-average common shares outstanding, basic and diluted . . . . . . . . . . . . . . .
35,997,473
29,589,132
See accompanying notes.
F-5
Quanterix Corporation
Consolidated Statements of Comprehensive Loss
(amounts in thousands)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other comprehensive (loss) income:
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . .
Total other comprehensive (loss) income . . . . . . . . . . . . . . . . . . . .
Comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2021
Years Ended December 31,
2020
2019
(57,688) $
(31,530) $
(40,796)
(1,993)
(1,993)
(59,681) $
2,587
2,587
(28,943) $
(153)
(153)
(40,949)
See accompanying notes.
F-6
Quanterix Corporation
Consolidated Statements of Cash Flows
(amounts in thousands)
Operating activities
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory step-up amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Credit loss expense on accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reduction in the carrying amounts of right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued compensation and benefits, other accrued expenses and other current liabilities. . . .
Contract acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities
Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from RADx grant on assets purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities
Proceeds from stock options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sale of common stock in at-the-market offering, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sale of common stock in underwritten public offering, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from ESPP purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments on notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net increase in cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of foreign currency exchange rate on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash, restricted cash, and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . .
Cash, restricted cash, and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplemental cash flow information
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of property and equipment included in accounts payable and other accrued
expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of property and equipment included in other non-current liabilities . . . . . . . . . . . . .
Common stock issued in connection with the acquisition of UmanDiagnostics AB. . . . . . . . . .
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total cash, cash equivalents, and restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
See accompanying notes.
F-7
Year Ended December 31,
2020
2021
2019
$ (57,688) $ (31,530) $ (40,796)
4,851
275
213
499
15,975
65
89
(6,853)
(393)
(8,090)
(2)
2,414
1,061
(192)
(1,230)
(363)
1,462
(47,907)
4,312
722
493
245
10,099
86
171
(6,733)
(3,927)
(5,119)
198
649
6,219
87
316
(488)
835
(23,365)
(13,616)
—
7,278
(6,338)
(3,930)
—
3,304
(626)
—
4,019
—
91,404
888
(75)
96,236
72,245
158
110,181
$ 399,042 $ 182,584
7,750
—
269,718
1,065
(7,738)
270,795
216,550
(92)
182,584
3,009
611
160
—
6,388
89
140
(3,525)
289
(3,447)
(21)
621
822
336
—
9,845
(708)
(26,187)
(10,847)
(14,529)
—
(25,376)
—
2,820
48,019
64,529
879
(50)
116,197
64,634
118
45,429
$ 110,181
$
$
$
$
389 $
625
$
656
229 $
— $
— $
1,029
$
— $
— $
164
7,572
5,468
$ 396,465 $ 181,584
1,000
$
$ 399,042 $ 182,584
2,577 $
$ 109,155
1,026
$
$ 110,181
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F-8
Quanterix Corporation
Notes to Consolidated Financial Statements
1. Organization and operations
Quanterix Corporation (Nasdaq: QTRX) (the Company) is a life sciences company that has developed next
generation, ultra-sensitive digital immunoassay platforms that advance precision health for life sciences research and
diagnostics. The Company’s platforms are based on its proprietary digital “Simoa” detection technology. The
Company’s Simoa bead-based and planar array platforms enable customers to reliably detect protein biomarkers in
extremely low concentrations in blood, serum and other fluids that, in many cases, are undetectable using conventional,
analog immunoassay technologies, and also allow researchers to define and validate the function of novel protein
biomarkers that are only present in very low concentrations and have been discovered using technologies such as mass
spectrometry. These capabilities provide the Company’s customers with insight into the role of protein biomarkers in
human health that has not been possible with other existing technologies and enable researchers to unlock unique
insights into the continuum between health and disease. The Company is currently focusing on protein detection, but the
Company’s Simoa platforms have also demonstrated applicability across other testing applications, including detection
of nucleic acids and small molecules.
The Company launched its first immunoassay platform, the Simoa HD-1, in 2014. The HD-1 is a fully
automated immunoassay bead-based platform with multiplexing and custom assay capability, and related assay test kits
and consumable materials. The Company launched a second bead-based immunoassay platform (SR-X) in the fourth
quarter of 2017 with a more compact footprint than the Simoa HD-1 and less automation designed for lower volume
requirements while still allowing multiplexing and custom assay capability. The Company initiated an early-access
program for its third instrument (SP-X) on the new Simoa planar array platform in January 2019, with the full
commercial launch commencing in April 2019. In July 2019, the Company launched the Simoa HD-X, an upgraded
version of the Simoa HD-1 which replaces the HD-1. The HD-X has been designed to deliver significant productivity
and operational efficiency improvements, as well as greater user flexibility. The Company began shipping and installing
HD-X instruments at customer locations in the third quarter of 2019. The Company also performs research services on
behalf of customers to apply the Simoa technology to specific customer needs. The Company's customers are primarily
in the research use only market, which includes academic and governmental research institutions, the research and
development laboratories of pharmaceutical manufacturers, contract research organizations, and specialty research
laboratories.
The Company acquired UmanDiagnostics AB (Uman), a Swedish company located in Umeå, Sweden, in
August 2019. The acquisition closed with respect to 95% of the outstanding shares of capital stock of Uman on July 1,
2019 and with respect to the remaining 5% of the outstanding shares of capital stock of Uman on August 1, 2019. Uman
supplies neurofilament light (Nf-L) antibodies and ELISA kits, which are widely recognized by researchers and
biopharmaceutical and diagnostics companies world-wide as the premier solution for the detection of Nf-L to advance
the development of therapeutics and diagnostics for neurodegenerative conditions. With the acquisition of Uman, the
Company has secured a long-term source of supply for a critical technology.
“At-the-market offering”
On March 19, 2019, the Company entered into a Sales Agreement (the Sales Agreement) with Cowen and
Company, LLC (Cowen) with respect to an “at-the-market” offering program under which the Company could offer and
sell, from time to time at its sole discretion, shares of its common stock, par value $0.001 per share, having an aggregate
offering price of up to $50.0 million through Cowen as its sales agent.
On June 5, 2019, the Company issued approximately 2.2 million shares of common stock at an average stock
price of $22.73 per share pursuant to the terms of the Sales Agreement. The “at-the-market” offering resulted in gross
proceeds of $49.7 million. The Company incurred $1.7 million in issuance costs associated with the “at-the-market”
offering, resulting in net proceeds to the Company of $48.0 million. On August 6, 2020, the Company delivered written
notice to Cowen to terminate the Sales Agreement, which termination the parties agreed to make immediately effective.
F-9
Underwritten public offering
On August 8, 2019, the Company entered into an underwriting agreement with J.P. Morgan Securities LLC
(J.P. Morgan) and SVB Securities LLC (f/k/a SVB Leerink) (Leerink), as representatives of the several underwriters,
relating to an underwritten public offering of approximately 2.7 million shares of the Company’s common stock, par
value $0.001 per share. The underwritten public offering resulted in gross proceeds of $69.0 million. The Company
incurred $4.5 million in issuance costs associated with the underwritten public offering, resulting in net proceeds to the
Company of $64.5 million.
On August 6, 2020, the Company entered into an underwriting agreement with Leerink and Cowen and
Company, LLC (Cowen), as representatives of the several underwriters, relating to an underwritten public offering of
approximately 3.0 million shares of the Company’s common stock, par value $0.001 per share. The underwritten public
offering resulted in gross proceeds of $97.6 million. The Company incurred $6.2 million in issuance costs associated
with the underwritten public offering, resulting in net proceeds to the Company of $91.4 million.
On February 3, 2021, the Company entered into an underwriting agreement with Goldman Sachs & Co. LLC
(Goldman Sachs), Leerink, and Cowen, as representatives of the several underwriters, relating to an underwritten public
offering of approximately 4.1 million shares of the Company’s common stock, par value $0.001 per share. The
underwritten public offering resulted in gross proceeds of $287.5 million. The Company incurred $17.8 million in
issuance costs associated with the underwritten public offering, resulting in net proceeds to the Company of
$269.7 million.
Liquidity
The Company has recognized annual losses from operations since inception and has an accumulated deficit of
$305.5 million at December 31, 2021 and the Company incurred a net loss of $57.7 million, $31.5 million, and
$40.8 million for the years ended December 31, 2021, 2020, and 2019, respectively. At December 31, 2021, the Company
had $396.5 million of unrestricted cash and cash equivalents. The Company expects the current cash balance will be
sufficient to fund operations for a period of at least one year from the date the consolidated financial statements are issued.
There can be no assurances, however, that no additional funding will be required or that additional funding will be available
on terms acceptable to the Company, or at all.
2. Significant accounting policies
Principles of consolidation
The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the
accounts of Quanterix Corporation, and its wholly-owned subsidiaries. All material intercompany transactions and
balances have been eliminated in consolidation.
Use of estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to
make estimates and assumptions that affect the amounts reported in the consolidated financial statements and
accompanying notes. In making those estimates and assumptions, the Company bases its estimates on historical
experience and on various other assumptions believed to be reasonable. The Company’s significant estimates included in
the preparation of the consolidated financial statements are related to revenue recognition, fair value of assets acquired
and liabilities assumed in acquisitions, and valuation of inventory. Actual results could differ from those estimates.
Reclassifications
Certain amounts in the prior years’ consolidated financial statements have been reclassified to conform to the
current year’s presentation.
F-10
Segment information
Operating segments are defined as components of an enterprise about which separate discrete information is
available for evaluation by the chief operating decision-maker, the Company’s Chief Executive Officer, in deciding how
to allocate resources and assess performance. The Company and the Company's chief operating decision-maker reviews
the Company's operations and manages its business as a single operating segment.
Revenue recognition
The Company recognizes revenue when a customer obtains control of a promised good or service. The amount
of revenue recognized reflects consideration that the Company expects to be entitled to receive in exchange for these
goods and services, incentives, and taxes collected from customers that are subsequently remitted to governmental
authorities.
The Company adopted Accounting Standards Codification (ASC) Topic 606 Revenue from Contracts with
Customers (ASC 606), on January 1, 2019, using the modified retrospective method for all contracts not completed as of
the date of adoption. The reported results for 2021, 2020, and 2019 reflect the application of ASC 606 guidance. The
Company recorded an adjustment to the accumulated deficit of $0.4 million as of January 1, 2019 for the cumulative
effect primarily related to the deferral of sales commissions. In accordance with the reporting requirements of ASC 606,
the disclosure of the impact on the Company’s consolidated statement of operations, as a result of adopting the
provisions of ASC 606, was as follows (in thousands):
For the Year Ended December 31, 2019
Product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Costs of goods sold and services . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling general and administrative expenses . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Customers
$
$
Under ASC 606
40,491
16,059
29,898
26,836
52,246
(40,796) $
$
Adjustment
Under ASC
605
55 $
273
1
327
27
300 $
40,546
16,332
29,899
27,163
52,273
(40,496)
The Company’s customers primarily consist of entities engaged in the life sciences research market that pursue
the discovery and development of new drugs for a variety of neurologic, cardiovascular, oncologic and other protein
biomarkers associated with diseases. The Company’s customer base includes several of the largest biopharmaceutical
companies, academic research organizations and distributors who serve certain geographic markets.
Product revenue
The Company’s products are composed of analyzer instruments, assay kits and other consumables such as
reagents. Products are sold directly to biopharmaceutical and academic research organizations or are sold through
distributors in EMEA and Asia Pacific regions. The sales of instruments are generally accompanied by an initial year of
implied service-type warranties and may be bundled with assays and other consumables and may also include other
items such as training and installation of the instrument and/or an extended service warranty. Revenues from the sale of
products are recognized at a point in time when the Company transfers control of the product to the customer, which is
upon installation for instruments sold to direct customers, and based upon shipping terms for assay kits and other
consumables. Revenue for instruments sold to distributors is generally recognized based upon shipping terms (either
upon shipment or delivery).
F-11
Service and other revenue
Service revenues are composed of contract research services, initial implied one-year service-type warranties,
extended services contracts and other services such as training. Contract research services are provided through the
Company’s Accelerator Laboratory and generally consist of fixed fee contracts. Revenues from contract research
services are recognized at a point in time when the Company completes and delivers its research report on each
individually completed study, or over time if the contractual provisions allow for the collection of transaction
consideration for costs incurred plus a reasonable margin through the period of performance of the services. Revenues
from service-type warranties are recognized ratably over the contract service period. Revenues from other services are
immaterial.
Collaboration and license revenue
The Company may enter into agreements to license the intellectual property and know-how associated with its
instruments in exchange for license fees and future royalties (as described below). The license agreements provide the
licensee with a right to use the intellectual property with the license fee revenues recognized at a point in time as the
underlying license is considered functional intellectual property. The Company has recognized revenues from sales- or
usage based royalties related to the Company’s licensing technology and intellectual property. ASC 606 provides for an
exception to estimating the variable consideration for sales- and usage-based royalties related to the license of
intellectual property, such that the sales- or usage-based royalty will be recognized in the period the underlying
transaction occurs. The Company has recorded sales- or usage-based royalty revenue for the years ended December 31,
2021, 2020, and 2019 related to the intellectual property licensed by Uman. The Company recognizes revenues from
sales- or usage based royalty revenue at the later of when the sales or usage occurs; and the satisfaction or partial
satisfaction of the performance obligation to which the royalty has been allocated.
Payment terms
The Company’s payment terms vary by the type and location of customer and the products or services offered.
Payment from customers is generally required in a term ranging from 30 to 45 days from date of shipment or satisfaction
of the performance obligation with no discounts for early payment. Occasionally the Company provides extended
payment terms or financing arrangements to customers.
F-12
Disaggregated revenue
When disaggregating revenue, the Company considered all of the economic factors that may affect its revenues.
The following tables disaggregate the Company's revenue from contracts with customers based on their location by
revenue type:
(in thousands)
Product revenues:
Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumable and other products . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service and other revenues:
Service-type warranties . . . . . . . . . . . . . . . . . . .
Research services . . . . . . . . . . . . . . . . . . . . . . . .
Other services . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collaboration and license revenue:
Collaboration and license revenue . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
$
(in thousands)
Product revenues:
Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumable and other products . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
$
Service and other revenues:
Service-type warranties . . . . . . . . . . . . . . . . . . .
Research services . . . . . . . . . . . . . . . . . . . . . . . .
Other services . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
$
Collaboration and license revenue:
$
Collaboration and license revenue . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Year Ended
December 31, 2021
NA
EMEA
Asia Pacific
Total
12,138
34,997
47,135
4,334
12,101
1,372
17,807
360
360
NA
8,680
14,305
22,985
3,171
15,011
700
18,882
11,685
11,685
$
$
$
$
$
$
$
$
$
$
$
$
8,178
16,122
24,300
2,039
2,600
695
5,334
288
288
$
$
$
$
$
$
5,657 $
3,970
9,627 $
255 $
124
109
488 $
25,973
55,089
81,062
6,628
14,825
2,176
23,629
— $
— $
648
648
Year Ended
December 31, 2020
EMEA
Asia Pacific
Total
4,332
10,854
15,186
1,543
2,225
435
4,203
124
124
$
$
$
$
$
$
3,594 $
2,252
5,846 $
207 $
737
100
1,044 $
16,606
27,411
44,017
4,921
17,973
1,235
24,129
— $
— $
11,809
11,809
F-13
(in thousands)
Product revenues:
Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consumable and other products . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Service and other revenues:
Service-type warranties . . . . . . . . . . . . . . . . . . .
Research services . . . . . . . . . . . . . . . . . . . . . . . .
Other services . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Collaboration and license revenue:
Collaboration and license revenue . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
$
Year Ended
December 31, 2019
NA
EMEA
Asia Pacific
Total
6,250
14,148
20,398
3,139
8,845
825
12,809
167
167
$
$
$
$
$
$
5,243
9,674
14,917
1,323
704
565
2,592
17
17
$
$
$
$
$
$
3,393 $
1,783
5,176 $
171 $
456
31
658 $
14,886
25,605
40,491
4,633
10,005
1,421
16,059
— $
— $
184
184
The Company’s contracts with customers may include promises to transfer multiple products and services to a
customer. The Company combines any performance obligations that are immaterial with one or more other performance
obligations that are material to the contract. For arrangements with multiple performance obligations, the Company
allocates the contract transaction price, including discounts, to each performance obligation based on its relative
standalone selling price. Judgment is required to determine the standalone selling price for each distinct performance
obligation. The Company determines standalone selling prices based on prices charged to customers in observable
transactions, and uses a range of amounts to estimate standalone selling prices for each performance obligation. The
Company may have more than one range of standalone selling price for certain products and services based on the
pricing for different customer classes.
Variable consideration in the Company’s contracts primarily relates to (i) sales- and usage-based royalties
related to the license of intellectual property in collaboration and license contracts and (ii) certain non-fixed fee research
services contracts.
The aggregate amount of transaction price that is allocated to performance obligations that have not yet been
satisfied or that are partially satisfied as of December 31, 2021 is $7.5 million. Of the performance obligations not yet
satisfied or that are partially satisfied, $6.4 million is expected to be recognized as revenue in the next 12 months, with
the remainder to be recognized within the 24 months thereafter. The $7.5 million principally consists of amounts billed
for undelivered services related to initial and extended service-type warranties and research services, as well as
$0.5 million related to undelivered licenses of intellectual property for a diagnostics company.
Changes in deferred revenue from contracts with customers were as follows (in thousands):
Year Ended
December 31, 2021
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Deferral of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognition of deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,998
8,090
(6,628)
7,460
Costs to obtain a contract
The Company’s sales commissions are generally based on revenues of the Company. The Company has
determined that certain commissions paid under its sales incentive programs meet the requirements to be capitalized as
they are incremental and would not have occurred absent a customer contract. The changes in the balance of costs to
obtain a contract are as follows (in thousands):
F-14
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferral of costs to obtain a contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recognition of costs to obtain a contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Year Ended December 31, 2021
248
905
(713)
440
$
The Company has classified the balance of capitalized costs to obtain a contract as a component of prepaid
expenses and other current assets as of December 31, 2021 and classifies the expense as a component of cost of goods
sold and selling, general and administrative expense over the estimated life of the contract. The Company considers
potential impairment in these amounts each period.
ASC 606 provides entities with certain practical expedients and accounting policy elections to minimize the
cost and burden of adoption. The Company will exclude from its transaction price any amounts collected from customers
related to sales and other similar taxes. The Company has elected to account for shipping and handling as an activity to
fulfill the promise to transfer the product, and therefore will not evaluate whether shipping and handling activities are
promised services to its customers.
The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with original
expected length of one year or less and (ii) contracts for which revenue is recognized at the amount to which the
Company has the right to invoice for services performed.
When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs
either significantly before or significantly after performance, resulting in a significant financing component. The
Company does not assess whether a significant financing component exists if the period between when the Company
performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s
contracts contained a significant financing component for the years ended December 31, 2021, 2020 and 2019.
Grant revenue
The Company recognizes grant revenue as it performs services under the arrangement when the funding is
committed. Revenues and related research and development expenses are presented gross in the consolidated statements
of operations as the Company has determined it is the primary obligor under the arrangement relative to the research and
development services.
Accounting for grants does not fall under ASC 606, as the grantor will not benefit directly from the Company’s
expansion or product development. As there is no authoritative guidance under U.S. GAAP on accounting for
government assistance to for-profit business entities, the Company has accounted for grants by analogy to International
Accounting Standards (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance (IAS 20).
Grants to the Company contain both monetary amounts granted related to assets and monetary amounts granted
related to income, which are grants other than those related to assets. The grants related to assets are for the expansion
and increase of manufacturing capacity. The grants related to income are for additional research and development, as
well as other non-asset related scale up costs.
Under IAS 20, grants related to assets shall be presented in the consolidated balance sheets either by
recognizing the grant as deferred income (which is recognized in the consolidated statements of operations on a
systematic basis over the useful life of the asset), or by deducting the grant in calculating the carrying amount of the
asset (which is recognized in the consolidated statements of operations over the life of the depreciable asset as a reduced
depreciation expense). Both methods are acceptable under IAS 20. The Company has elected to record grants related to
assets as a deduction in calculating the carrying value of the asset.
Under IAS 20, grants related to income are presented as part of the consolidated statements of operations, either
separately or under a general heading. Both methods are acceptable under IAS 20. The Company has elected to record
F-15
grants related to income separately on the consolidated statements of operations as grant revenue. The related expenses
are recorded within operating expenses.
On June 22, 2020, the Company entered into a workplan 1 award (WP1) with the National Institute of Health
(NIH), under the Rapid Acceleration of Diagnostics (RADx) program to assess the feasibility of a novel SARS-CoV-2
antigen detection test using the Company’s Simoa technology. WP1 was complete as of December 31, 2020.
On September 29, 2020, the Company entered into WP2 with the NIH under its RADx program. The contract,
which has a total award value of $18.2 million, accelerates the continued development, scale-up, and deployment of the
novel SARS-CoV-2 antigen detection test using the Company’s Simoa technology. The contract provides funding to
expand assay kit manufacturing capacity and commercial deployment readiness. Release of the $18.2 million of funding
under WP2 is based on the achievement of certain milestones. Contract funding was subject to achievement of these pre-
defined milestones and the contract period ran through September 2021, with one milestone extended to March 31, 2022.
As of December 31, 2021, the Company had received $17.7 million out of the full $18.2 million under WP2. During the
year ended December 31, 2021, the Company recognized $5.2 million in grant revenue and incurred $3.4 million in
research and development expense related to WP2. During the year ended December 31, 2020, the Company recognized
$4.4 million in grant revenue and incurred $2.6 million in research and development expense related to WP2.
The following table summarizes the cumulative activity under WP2 as of December 31, 2021 and
December 31, 2020 (in thousands):
Total grant revenue from research and development activities . . . . . . . .
Total proceeds used for assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred proceeds for assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred grant revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total amount accrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total cash received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total proceeds received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total proceeds reasonably assured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total WP2 grant amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
$
$
Business combinations
December 31, 2021
December 31, 2020
9,576 $
8,104
—
—
17,680 $
17,680 $
—
17,680 $
17,680 $
520
18,200 $
4,362
826
2,478
304
7,970
7,970
(2,968)
5,002
5,002
13,198
18,200
Under the acquisition method of accounting, the Company generally recognizes the tangible and identifiable
intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The fair
values recognized, defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between willing market participants, are based on estimates and assumptions determined by management.
The excess consideration over the aggregate value of acquired tangible and intangible assets, net of liabilities
recognized, is recorded as goodwill. These valuations require significant estimates and assumptions, especially with
respect to intangible assets.
The Company typically uses the discounted cash flow method to value acquired intangible assets. This method
requires significant management judgment to forecast future operating results and establish residual growth rates and
discount factors. The estimates used to value and amortize intangible assets are consistent with the plans and estimates
that are used to manage the business and are based on available historical information. If the subsequent actual results
and updated projections of the underlying business activity change compared with the assumptions and projections used
to develop these values, the Company could experience impairment charges. In addition, the Company has estimated the
F-16
economic lives of certain acquired assets and these lives are used to calculate depreciation and amortization expense. If
estimates of the economic lives change, depreciation or amortization expenses could be accelerated or slowed.
Cost of revenue
Cost of product revenue consists of raw materials, parts costs and associated freight, shipping and handling
costs, contract manufacturer costs, personnel costs, yield loss, in-license payments and royalties, stock-based
compensation, other direct costs and overhead.
Cost of service and other revenue consists of personnel, facility costs associated with operating the Accelerator
Laboratory on behalf of the customers, costs related to instrument maintenance and servicing equipment at customer
sites, other direct and overhead.
Cost of license revenue consists of license fees that are the direct results of cash payments received related to
license agreements.
Research and development expenses
Research and development expenses, including personnel costs, allocated facility costs, lab supplies, outside
services, contract laboratory costs are charged to research and development expense as incurred. The Company accounts
for nonrefundable advance payments for goods and services that will be used in future research and development
activities as expense when the service has been performed or when the goods have been received. Expenses incurred
related to grant funded activities are recorded in research and development expense.
Selling, general, and administrative expenses
Selling, general, and administrative expenses are primarily composed of compensation and benefits associated
with sales and marketing, finance, human resources, and other administrative personnel, outside marketing, advertising,
allocated facilities costs, legal expenses, and other general and administrative costs.
Net loss per share
Basic net loss per common share attributable to common stockholders is calculated by dividing the loss
attributable to common stockholders by the weighted-average number of common shares. For purposes of the diluted net
loss per share calculations, unvested restricted common stock, restricted stock units, common stock options, and
warrants are considered to be potentially dilutive securities, but are excluded from the diluted net loss per share because
their effect would be anti-dilutive and therefore basic and diluted net loss per share were the same for all periods
presented.
The following table sets forth the outstanding potentially dilutive securities that have been excluded in the
calculation of diluted net loss per share because to do so would be anti-dilutive (in common stock equivalent shares):
Unvested restricted common stock and restricted stock units . . .
Outstanding stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding common stock warrants . . . . . . . . . . . . . . . . . . . . . . .
2021
531,473
2,304,543
—
Year Ended December 31,
2020
518,387
2,494,045
10,000
2019
409,929
2,507,062
10,000
F-17
Cash and cash equivalents
Cash and cash equivalents consist of cash deposits and short-term, highly liquid investments that are readily
convertible into cash, with original maturities of three months or less. Cash equivalents are carried at fair value based on
quoted prices for identical assets. Cash and cash equivalents consist of the following (in thousands):
As of
December 31,
2021
2020
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Money market funds invested in U.S. Treasury obligations . . . . . . . . . . . . . . .
Total cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
64,372 $
332,093
396,465 $
19,535
162,049
181,584
Restricted cash and deposits
Restricted cash primarily represents collateral for a letter of credit issued as security for the lease for the
Company’s headquarters in Billerica, Massachusetts, and additional space in Bedford, Massachusetts, and to secure the
Company’s corporate credit card program. The restricted cash is long term in nature as the Company will not have
access to the funds until more than one year from December 31, 2021.
Allowance for credit losses
The Company is exposed to credit losses primarily through sales of products and services. The Company’s
expected loss allowance methodology for accounts receivable is developed using historical collection experience, current
and future economic and market conditions, and a review of the current status of customers’ trade accounts receivable.
Due to the short-term nature of such receivables, the estimated accounts receivable that may not be collected is based on
aging of the accounts receivable balances.
Customers are assessed for credit worthiness upfront through a credit review, which includes assessment based
on the Company’s analysis of customers’ financial statements when a credit rating is not available. The Company
evaluates contract terms and conditions, country, and political risk, and may require prepayment to mitigate risk of loss.
Specific allowance amounts are established to record the appropriate provision for customers that have a higher
probability of default. The Company monitors changes to the receivables balance on a timely basis, and balances are
written off as they are determined to be uncollectable after all collection efforts have been exhausted.
Inventory
Inventory is stated at the lower of cost or market on a first-in, first-out (FIFO) basis. The Company analyzes its
inventory levels on each reporting date and writes down inventory that is expected to expire prior to being sold and
inventory in excess of expected sales requirements. In the event that the Company identifies these conditions exist in its
inventory, the carrying value is reduced to its estimated net realizable value.
Property and equipment
Property and equipment, including leasehold improvements, are stated at cost and are depreciated, or amortized
in the case of leasehold improvements, over their estimated useful lives using the straight-line method. Expenditures for
maintenance and repairs are charged to expense as incurred, whereas major betterments are capitalized as additions to
property and equipment. The Company reviews its property and equipment whenever events or changes in
circumstances indicate that the carrying value of certain assets might not be recoverable and recognizes an impairment
F-18
loss when it is probable that an asset’s realizable value is less than the carrying value. To date, no such impairment
losses have been recorded. Depreciation is calculated based upon the following estimated useful lives of the assets:
Laboratory and manufacturing equipment
Computers and software
Office furniture and equipment
Leasehold improvements
Five years
Three years
Seven years
Shorter of the useful life of the asset or the
remaining term of the lease
Leases
The Company accounts for leases in accordance with ASC Topic 842, Leases (ASC 842), which was adopted
on January 1, 2020, using the optional transition method allowing entities to recognize a cumulative effect adjustment to
the opening balance sheet without restating comparative prior periods presented. At adoption the Company elected the
package of practical expedients which was applied consistently to all of its leases at the transition date: i) the Company
did not reassess whether any expired or existing contracts are or contain leases; ii) the Company did not reassess the
lease classification for any expired or existing leases (that is, all existing leases that were classified as operating leases in
accordance with ASC 840, Leases (ASC 840), are classified as operating leases); and iii) the Company did not reassess
initial direct costs for any existing leases.
ASC 842 requires a lessee to recognize assets and liabilities on the balance sheet for most leases and changes
many key definitions, including the definition of a lease. Lessees are differentiated between finance leases and operating
leases, and classification impacts expense recognition. At the inception of an arrangement, the Company determines
whether the arrangement is or contains a lease based on the facts and circumstances present in the arrangement. Leases
with a term greater than one year are recognized on the balance sheet as right-of-use (ROU) assets and short-term and
long-term lease liabilities, as applicable. The Company does not recognize leases on the balance sheet with a term of
twelve months or less. The Company’s leases consist of office and lab space and office equipment. All of the Company’s
leases are classified as operating, and options to renew a lease are only included in the lease term to the extent those
options are reasonably certain to be exercised. Additionally, the Company does not separate lease and non-lease
components for all leases.
Operating lease liabilities and their corresponding ROU assets are initially recorded based on the present value
of lease payments over the expected remaining lease term. The rate implicit in lease contracts is typically not readily
determinable and, as a result, the Company utilizes its incremental borrowing rate to discount lease payments, which
reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments, for
a similar term, in a similar economic environment. To estimate its incremental borrowing rate, a credit rating applicable
to the Company is estimated using a synthetic credit rating analysis since the Company does not currently have a rating
agency-based credit rating.
Software development costs
The Company develops and modifies software related to the operation of the instrument. Software development
costs are expensed as incurred until the point the Company establishes technological feasibility. Based on the
Company’s product development process, technological feasibility is established upon the completion of a working
model. The Company does not incur material costs between the completion of the working model and the point at which
the product is ready for release. Therefore, software development costs are charged to the statement of operations as
incurred as research and development expense.
Fair value of financial instruments
ASC Topic 820, Fair Value Measurement (ASC 820), establishes a fair value hierarchy for instruments
measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the
Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in
pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable
F-19
inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing
the asset or liability, and are developed based on the best information available in the circumstances.
ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for
considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value
hierarchy that distinguishes between the following:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or
indirectly; and
Level 3 inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions
market participants would use in pricing the asset or liability.
To the extent that the valuation is based on models or inputs that are less observable or unobservable in the
market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the
Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level
within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The carrying amount reflected on the balance sheets for cash and cash equivalents, accounts receivable, prepaid
expenses and other current assets, accounts payable and accrued liabilities approximated their fair values, due to the
short-term nature of these instruments. The carrying value of the long-term debt approximates its fair value as the debt
arrangement is based on interest rates the Company believes it could obtain for borrowings with similar terms.
Fair value measurements are as follows (in thousands):
December 31, 2021
Financial assets
Cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2020
Financial assets
Cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Warranties
Quoted prices
in active
markets
(Level 1)
Significant other
observable
inputs (Level 2)
Significant
unobservable
inputs
(Level 3)
Total
332,093
332,093
$
$
332,093
332,093
$
$
— $
— $
—
—
Quoted prices
in active
markets
(Level 1)
Significant
other
observable
inputs (Level 2)
Significant
unobservable
inputs
(Level 3)
Total
162,049
162,049
$
$
162,049
162,049
$
$
— $
— $
—
—
$
$
$
$
The Company provides a one-year warranty and maintenance service related to its instruments and sells
extended warranty contracts for additional periods. The Company defers revenue associated with these services and
recognizes them on a pro-rata basis over the period of service.
Income taxes
The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events
that have been recognized in the Company’s consolidated financial statements or tax returns. Under this method,
deferred tax assets and liabilities are determined based on differences between the consolidated financial statement
F-20
carrying amounts and the tax bases of the assets and liabilities using the enacted tax rates in effect in the years in which
the differences are expected to reverse. A valuation allowance against deferred tax assets is recorded if, based on the
weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740 Income
Taxes (ASC 740). When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the
extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more
likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available
facts and circumstances. As of December 31, 2021 and 2020, the Company did not have any significant uncertain tax
positions.
Credit, product, and supplier concentrations and off-balance-sheet risk
The Company has no significant off-balance-sheet risk, such as foreign exchange contracts, option contracts, or
other hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk
primarily consist of cash and cash equivalents and a cost method investment. The Company places its cash and cash
equivalents principally in depository accounts with a bank.
The Company is also subject to supply chain risks related to the outsourcing of the manufacturing of its
instruments. Although there are a limited number of manufacturers for instruments of this type, the Company believes
that other suppliers could provide similar products on comparable terms. A change in suppliers, however, could cause a
delay in manufacturing and a possible loss of sales, which would adversely affect operating results. In addition to
outsourcing the manufacturing of its instruments, the Company also purchases antibodies through a number of different
suppliers. Although a disruption in service from any one of its antibody suppliers is possible, the Company believes that
it would be able to find an adequate supply from alternative suppliers.
Customers outside the United States represented 39% and 29% of the Company’s gross trade accounts
receivable balance as of December 31, 2021 and 2020, respectively.
As of December 31, 2021, one customer represented 18% of the Company’s aggregate accounts receivable. As
of December 31, 2020, one customer represented 19% of the Company’s aggregate accounts receivable. During the
years ended December 31, 2021 and 2019, no individual customer represented 10% of the Company’s total revenue.
During the year ended December 31, 2020, one company represented 13% of the Company’s total revenue.
Stock-based compensation
The Company accounts for stock-based compensation awards in accordance with ASC 718, Compensation—
Stock Compensation (ASC 718). ASC 718 requires all stock-based payments to employees including grants of employee
stock options, to be recognized in the statement of operations based on their fair values. Stock-based compensation
awards have historically consisted of stock options and restricted stock. Prior to the adoption of Accounting Standards
Update (ASU) No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-
Based Payment Accounting (ASU 2018-07), the measurement date for non-employee awards was generally the date the
services were completed, resulting in financial reporting period adjustments to stock-based compensation during the
vesting period for changes in the fair value of the awards. The Company adopted ASU 2018-07 on January 1, 2020.
After the adoption of ASU 2018-07, the measurement date for non-employee awards is the date of grant without changes
in the fair value of the award. Stock-based compensation costs for non-employees are recognized as expense over the
vesting period on a straight-line basis. There were no material non-employee awards outstanding during the years ended
December 31, 2021, 2020, and 2019.
The Company recognizes forfeitures as they occur. The Company estimates the grant date fair value, and the
resulting stock-based compensation expense, using the Black-Scholes option-pricing model. The grant date fair value of
the stock-based awards is generally recognized on a straight-line basis over the requisite service period, which is
generally the vesting period of the respective awards.
F-21
The fair value of stock options granted to employees and non-employees is estimated on the grant date using
the Black-Scholes option-pricing model, based on the assumptions noted in the following table:
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average grant date fair value . . . . . . . . . . . . .
2021
0.4% - 1.3%
None
6.0
49.2% - 55.6%
$ 29.96
Year Ended December 31,
2020
0.4% - 1.7%
None
6.0
43.9% - 49.2%
$ 12.66
2019
1.4% - 2.6%
None
6.0
33.5% - 39.7%
$ 9.09
Expected volatility was calculated based a proportional weighting of reported volatility data for a representative
group of guideline publicly traded companies for which historical information was available, as well as the Company’s
stock. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant, commensurate
with the expected term assumption. The Company estimates the expected term of options granted to employees utilizing
the simplified method which calculates the expected term of an option as the average of the time to vesting and
contractual life of the options. The expected term is applied to the stock option grant group as a whole, as the Company
does not expect substantially different exercise or post-vesting termination behavior among its employee population. The
Company uses the simplified method due to the lack of historical exercise data and the plain nature of the stock options.
The Company uses the remaining contractual term for the expected term of non-employee awards. The expected
dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any
dividends on common stock.
Recent accounting pronouncements
Adopted
In June 2016, the Financial Accounting Standards Board (FASB) established Topic 326, Financial
Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments (ASC 326) by issuing ASU
No. 2016-13 (ASU 2016-13), which amends the impairment model by requiring entities to use a forward-looking
approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade
receivables and available-for-sale debt securities. The Company early adopted ASU 2016-13 on January 1, 2021 using
the modified retrospective approach. The Company’s consolidated financial statements for prior-year periods have not
been revised and are reflective of the credit loss requirements which were in effect for that period. The adoption of ASU
2016-13 did not have a material impact on the Company’s consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software
(Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That
Is a Service Contract (ASU 2018-15). This ASU addresses the accounting for implementation, setup and other upfront
costs paid by a customer in a cloud computing or hosting arrangement. The guidance aligns the accounting treatment of
these costs incurred in a hosting arrangement treated as a service contract with the requirements for capitalization and
amortization costs to develop or obtain internal-use software. The Company adopted ASU 2018-15 on January 1, 2021
using the prospective method. The adoption of ASU 2018-15 did not have a material impact on the Company’s
consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income
Taxes (ASU 2019-12), which is intended to simplify various areas related to ASC 740, Income Taxes (ASC 740).
ASU 2019-12 removes certain exceptions for performing intra period tax allocations and calculating income taxes in
interim periods. The guidance also simplifies the accounting for transactions that result in a step-up in the tax basis of
goodwill and the effect of enacted changes in tax laws or rates in interim periods. The Company early adopted
ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s
consolidated financial statements.
F-22
3. Inventory
Inventory consists of the following (in thousands):
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
7,892 $
4,923
9,375
22,190 $
5,265
3,306
6,285
14,856
Inventory comprises commercial instruments, assays, and the materials required to manufacture assays.
As of December 31,
2021
2020
4. Property and equipment
Property and equipment consists of the following (in thousands):
As of December 31,
2021
2020
Laboratory and manufacturing equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computers and software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
9,742 $
1,617
3,893
10,413
25,665 $
(7,705)
17,960 $
8,523
1,556
1,504
8,765
20,348
(6,436)
13,912
The Company incurred depreciation expense of $2.8 million, $2.2 million and $1.6 million for the years ended
December 31, 2021 2020, and 2019, respectively. The Company has instruments included in laboratory and
manufacturing equipment, which are used internally by the Company. As of December 31, 2021, the laboratory and
manufacturing equipment balance includes $3.9 million of cost and $1.5 million of accumulated depreciation related to
these instruments. As of December 31, 2020, the laboratory and manufacturing equipment balance includes $3.4 million
of cost and $1.8 million of accumulated depreciation related to these instruments.
5. Other accrued expenses
Other accrued expenses consist of the following (in thousands):
Accrued inventory purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued property and equipment purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued professional services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued development costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
568 $
229
1,250
2,126
566
430
1,317
6,486 $
527
670
1,845
797
323
156
527
4,845
As of December 31,
2021
2020
F-23
6. Income taxes
The following table presents the components of loss before income taxes (in thousands):
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total loss before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
2021
Year Ended December 31,
2020
(29,896) $
(2,010)
(31,906) $
(56,554) $
(1,170)
(57,724) $
2019
(40,010)
(973)
(40,983)
The following table summarizes income tax benefit (in thousands):
2021
Year Ended December 31,
2020
2019
Current:
United States
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current income tax provision . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred
United States
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . .
Total income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
— $
(30)
(342)
(372)
5
(6)
409
408
36
$
— $
(13)
(102)
(115)
(8)
(3)
502
491
376 $
—
(20)
(93)
(113)
(3)
(1)
304
300
187
A reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:
Federal statutory income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign tax rate differential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State taxes, net of federal benefit . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Permanent items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax rate change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021
Year Ended December 31,
2020
2019
21.0 %
— %
6.5 %
2.0 %
7.4 %
(1.8)%
0.2 %
(34.8)%
(0.4)%
0.1 %
21.0 %
0.30 %
2.5 %
1.6 %
5.2 %
(0.4)%
0.3 %
(29.7)%
0.4 %
1.2 %
21.0 %
— %
3.2 %
2.3 %
2.3 %
(0.9)%
(1.4)%
(24.6)%
(1.4)%
0.5 %
The effective income tax rate of differs from the U.S. Federal statutory rate of 21.0% primarily as a result of the
valuation allowance maintained against the Company’s net deferred tax assets.
During 2019, the Company acquired Uman, a Swedish entity. The Company analyzed the transaction from an
income tax perspective and found that there was no tax deductible goodwill or other identifiable intangible assets related
to the transaction.
F-24
Deferred tax assets and liabilities reflect the net tax effects of temporary differences between the carrying
amount of assets and liabilities for financial reporting and the amounts used for income tax purposes. Significant
components of the Company’s deferred tax assets and liabilities were as follows (in thousands):
Deferred tax assets:
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities:
Right-of-Use Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization acquired intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
December 31,
2021
2020
67,543 $
6,113
1,862
962
3,138
686
5,464
2,340
88,108
(83,121)
4,987
(2,867)
(1,752)
(2,208)
—
(66)
(129)
(2,035) $
50,233
5,101
2,167
1,054
1,956
—
5,703
2,533
68,747
(63,609)
5,138
(2,957)
(1,775)
(2,880)
(64)
(49)
(61)
(2,648)
The Company’s change in its valuation allowance account with respect to the deferred tax asset is as follows (in
thousands):
Balance, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
2021
2020
63,609
19,512
83,121
$
$
54,137
9,472
63,609
The valuation allowance increased during the year ended December 31, 2021 as compared to the year ended
December 31, 2020, primarily as a result of the U.S. operating losses incurred, stock-based compensation windfall
benefits and research and development tax credit carryforwards generated during the year.
In determining the need for a valuation allowance, the Company has given consideration to the cumulative book
income and loss positions of each of its entities as well as its worldwide cumulative book loss position. The Company
has assessed, on a jurisdictional basis, the available means of recovering deferred tax assets, including the ability to
carryback net operating losses (NOLs), the existence of reversing taxable temporary differences, the availability of tax
planning strategies, and forecasted future taxable income. At December 31, 2021, the Company maintains a full
valuation allowance against its worldwide net deferred tax assets.
As of December 31, 2021, the Company had U.S. federal NOLs of approximately $267.2 million. U.S. federal
NOLs generated through December 31, 2017, of approximately $108.5 million expire at various dates through 2037, and
U.S. federal NOLs generated in the tax years beginning after December 31, 2017 of approximately $158.7 million do not
expire. As of December 31, 2021, the Company had $178.8 million of state NOLs, approximately $168.8 million expire
at various dates through 2041, and certain state NOLs of approximately $10.0 million do not expire. As of December 31,
2021, the Company had U.S. federal tax credit carryforwards of approximately $5.1 million that expire at various dates
F-25
through 2041. As of December 31, 2021, the Company had U.S. state tax credit carryforwards of approximately
$1.3 million that expire at various dates through 2036.
Under Sections 382 and 383 of the U.S. Internal Revenue Code, if a corporation undergoes an ownership
change, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes, such as research tax
credits, to offset its post-change income and taxes may be limited. In general, an ownership change generally occurs if
there is a cumulative change in its ownership by 5% stockholders that exceeds 50 percentage points over a rolling three-
year period. Similar rules may apply under U.S. state tax laws. Under the Tax Cuts and Jobs Act of 2017 (TCJA), the use
of federal NOLs arising in taxable years beginning after December 31, 2017 is limited to 80% of current year taxable
income and NOLs arising in taxable years ending after December 31, 2017 may not be carried back (though any such
NOLs may be carried forward indefinitely).
The Company may have experienced an ownership change in the past and may experience ownership changes
in the future as a result of future transactions in its share capital, some of which may be outside of the control of the
Company. As a result, if the Company earns net taxable income, its ability to use its pre-change NOLs, or other pre-
change tax attributes, to offset U.S. federal and state taxable income and taxes may be subject to significant limitations.
The Coronavirus Aid, Relief and Economic Security Act (the CARES Act) was enacted in the United States on
March 27, 2020. The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to
strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. While the CARES
Act provides extensive tax changes in response to the COVID-19 pandemic, the provisions do not have a significant
impact on the Company’s financial results. In July 2021, the Company filed for a $2.1 million refund under the CARES
Act relating to an employee retention credit (ERC). The ERC is a refundable payroll tax credit. The Company expects
receipt of the ERC refund during the first half of 2022, and this amount is included in prepaid expenses and other current
assets on the consolidated balance sheet as of December 31, 2021.
The Company accounts for uncertain tax positions using a more likely than not threshold for recognizing
uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to,
changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement
of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The
Company evaluates uncertain tax positions on an ongoing basis and adjusts the level of the liability to reflect any
subsequent changes in the relevant facts surrounding the uncertain positions. The Company accounts for interest and
penalties related to uncertain tax positions as a component of its benefit (provision) for income taxes. For the years
ended December 31, 2021, 2020, and 2019, the Company had no tax reserves accrued for uncertain tax positions and
there were no accrued interest or penalties in the consolidated statements of operations.
The Company is subject to taxation in the United States as well as the Netherlands, Sweden, and China. At
December 31, 2021, the Company is generally no longer subject to examination by taxing authorities in the United
States for years prior to 2018. However, NOLs and credits in the United States may be subject to adjustments by taxing
authorities in future years in which they are utilized. The Company’s foreign subsidiaries remain open to examination by
taxing authorities from 2016 onward.
As of December 31, 2021, the Company’s foreign subsidiaries had immaterial undistributed earnings and the
tax payable on the earnings that are indefinitely reinvested would be immaterial.
F-26
7. Stockholders’ equity
Stock-based compensation
Stock-based compensation expense for all stock awards consists of the following (in thousands):
Cost of product revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of service and other revenue . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general, and administrative . . . . . . . . . . . . . . . . . . . . . . . . .
Total stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
471
403
1,807
13,294
15,975
$
$
189 $
311
1,129
8,470
10,099 $
86
238
718
5,346
6,388
2021
December 31,
2020
2019
At December 31, 2021, there was $35.8 million of total unrecognized compensation cost related to unvested
stock options and restricted stock units which is expected to be recognized over the remaining weighted-average vesting
period of 2.9 years.
Stock-based compensation plans
In June 2007, the Company adopted the 2007 Stock Option and Grant Plan (the 2007 Plan), under which it
could grant incentive stock options, non-qualified options, restricted stock, and stock grants. In connection with the
completion of the IPO, the Company terminated the 2007 Plan. As of December 31, 2021, 709,772 shares were
outstanding. No shares were available for future grant under the 2007 Plan.
In December 2017, the Company adopted the 2017 Employee, Director and Consultant Equity Incentive Plan
(the 2017 Plan), under which it may grant incentive stock options, non-qualified stock options, restricted stock, and other
stock-based awards. As of December 31, 2017, the 2017 Plan allowed for the issuance of up to 1,042,314 shares of
common stock plus up to 2,490,290 shares of common stock represented by awards granted under the 2007 Plan that are
forfeited, expired, or are cancelled without delivery of shares or which result in the forfeiture of shares of common stock
back to the Company on or after the date the 2017 Plan became effective. As of December 31, 2021, 2,026,021 shares
were outstanding and there were 1,434,072 shares available for grant under the 2017 Plan.
In addition, the 2017 Plan contains an "evergreen" provision, which allows for an annual increase in the number
of shares of common stock available for issuance under the 2017 Plan on the first day of each fiscal year during the
period beginning in fiscal year 2019 and ending in fiscal year 2027. The annual increase in the number of shares shall be
equal to the lowest of: 4% of the number of shares of common stock outstanding as of such date; and an amount
determined by the Company’s Board of Directors or Compensation Committee. On January 3, 2022, the number of
shares of common stock available for issuance under the 2017 plan was automatically increased by 1,469,428 shares.
In December 2017, the Company adopted the 2017 Employee Stock Purchase Plan (the 2017 ESPP). As
December 31, 2019, the 2017 ESPP allowed for the issuance of up to 612,572 shares of common stock. As of
December 31, 2021, 1,137,595 shares were available for grant under the 2017 ESPP.
In addition, the 2017 ESPP contains an "evergreen" provision, which allows for an increase on the first day of
each fiscal year beginning with fiscal year 2018. The increase in the number of shares shall be equal to the lowest of: 1%
of the number of shares of common stock outstanding on the last day of the immediately preceding fiscal year or an
amount determined by the Company’s Board of Directors or Compensation Committee. The number of shares available
for grant under the 2017 ESPP increased by 367,357 shares on January 3, 2022 due to this provision.
The 2017 ESPP provides for six-month option periods commencing on March 1 and ending August 31 and
commencing September 1 and ending February 28 of each calendar year.
F-27
Warrants
The following table summarizes the Company’s outstanding warrants:
As of December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As of December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock options
Weighted
Average
Issued and
exercisable
10,000 $
—
(10,000)
—
— $
Exercise Price
21.00
—
21.00
—
—
Under the 2007 and 2017 Plans, stock options may not be granted with exercise prices of less than fair market
value on the date of the grant. Options generally vest ratably over a four-year period with 25% vesting on the first
anniversary and the remaining 75% vesting ratably on a monthly basis over the remaining three years. These options
expire ten years after the grant date. Option activity is as follows:
Outstanding at December 31, 2020 ........................
Granted ................................................................
Exercised .............................................................
Cancelled .............................................................
Outstanding at December 31, 2021 ........................
Exercisable at December 31, 2021 .........................
Vested and expected to vest at
December 31, 2021 ................................................
Restricted stock awards
Weighted-average Remaining contractual
life (in years)
intrinsic value
(in thousands)
71,760
7.27 $
Options
$
2,494,045
439,209
$
(516,804) $
(211,637) $
$
2,204,813
$
1,493,289
exercise price
17.73
62.06
15.24
36.32
25.36
16.34
6.76 $
5.90 $
44,813
39,191
2,204,813
$
25.36
6.76 $
44,813
In January 2015, the Company issued 781,060 shares of restricted common stock to an executive of the
Company under the 2007 Plan. The majority of these shares were issued subject to a four-year vesting schedule with
25% vesting on the first anniversary and the remaining vesting 75% ratably on a monthly basis over the remaining three
years, while another portion was issued subject to performance-based vesting. The vesting of performance-based awards
is dependent upon achievement of specified financial targets of the Company. The majority of the performance criteria
were achieved during the years ended December 31, 2016 and 2015 and the remaining unvested awards with
performance conditions are not material. No restricted stock awards were granted during the years ended December 31,
2021, 2020, or 2019. As of December 31, 2021, the Company had 39,803 shares of unvested restricted common stock
with a weighted average grant date fair value of $3.12 per share.
Restricted stock units
Restricted stock units (RSUs) represent the right to receive shares of common stock upon meeting specified
vesting requirements. A summary of RSU activity is as follows:
Unvested RSUs as of December 31, 2020 . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cancelled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unvested RSUs as of December 31, 2021 . . . . . . .
Expected to convert at December 31, 2021 . . . . . .
Weighted-average Weighted-average
grant date fair
value per share
remaining contractual
life (in years)
Aggregate
intrinsic value
(in thousands)
22,254
8.83 $
9.68 $
$
22,467
22,467
28.08
58.20
27.31
44.64
49.32
49.32
Shares
478,581
$
$
428,235
(267,189) $
(109,756) $
529,871
529,871
$
F-28
8. Leases
The Company is a lessee under leases of offices, lab spaces, and certain office equipment. Some of the
Company’s leases include options to extend the lease, and these options are included in the lease term to the extent they
are reasonably certain to be exercised.
900 Middlesex Turnpike Lease
The Company’s primary lease is the 900 Middlesex Turnpike Lease. On October 2, 2018, the Company entered
into a 137-month operating lease for the Company’s new headquarters in Billerica, Massachusetts. The lease is for
approximately 92,000 square feet of office and laboratory space and commenced on April 1, 2019. The lease contains a
period of free rent and escalating monthly rent payments. As part of the lease, the Company was required to enter into a
$1.0 million Letter of Credit drawable by the lessor under specifically outlined conditions, which will be subsequently
reduced throughout the lease term. Pursuant to a work letter entered into in connection with the 900 Middlesex Turnpike
Lease, the landlord contributed an aggregate of $8.2 million toward the cost of construction and tenant improvements for
the building. Under the lease, the Company has the option to extend the lease for two successive five-year terms, and the
renewal options are not reasonably certain to be exercised.
In applying the ASC 842 transition guidance, the 900 Middlesex Turnpike Lease remained classified as an
operating lease and the Company recorded ROU assets of $12.2 million and lease liability of $22.7 million on the
effective date. The difference between the ROU and the lease liability was driven by the Company derecognizing
deferred rent of $3.0 million and the lease obligation incentive of $7.6 million. The Company is recognizing rent
expense on a straight-line basis throughout the remaining term of the leases.
48 Tvistevägen
The Company has multiple leases at 48 Tvistevägen Umeå, Sweden for laboratory spaces, manufacturing
spaces, and office space (the Uman leases). All of these Uman leases have been assessed as operating leases.
In applying the ASC 842 transition guidance, the Uman leases remained classified as operating leases and the
Company recorded ROU assets of less than $0.1 million and lease liability of less than $0.1 million on the effective date.
The Company is recognizing rent expense on a straight-line basis throughout the remaining term of the leases.
Summary of all lease costs recognized under ASC 842
The following table contains a summary of the lease costs recognized under ASC 842 and other information
pertaining to the Company’s operating leases:
Operating leases (in thousands)
Lease costs (1)
Operating lease costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other information
Operating cash flows used for operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average remaining lease term (years) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2021
2020
2,660 $
2,660 $
2,663
2,663
3,388 $
8.6
9.73%
2,108
9.8
9.73%
$
$
$
(1) Short-term lease costs and variable lease costs incurred by the Company for the year ended December 31,
2021 were considered immaterial.
F-29
Rent expense is calculated on a straight-line basis over the term of the lease. Rent expense recognized under all
leases was $5.4 million, $4.8 million, and $3.3 million for the years ended December 31, 2021, 2020, and 2019,
respectively. Note that the Company adopted ASC 842 effective January 1, 2020 using the required modified
retrospective approach and utilizing the effective date as its date of initial application. Therefore, the amount disclosed
pertaining to the year ended December 31, 2019 is presented under previous accounting guidance and is not comparable
to the amounts recorded in the 2021 and 2020 periods under ASC 842.
Future minimum commitments under ASC 842 under the Company’s operating leases in effect at December 31,
2021 were as follows:
Maturity of lease liabilities (in thousands)
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
As of December 31, 2021
3,466
3,515
3,557
3,655
3,765
14,782
32,740
10,850
21,890
$
$
$
9. Commitments and contingencies
License agreements
Tufts University
In June 2007, the Company entered into a license agreement (the License Agreement) for certain intellectual
property with Tufts University (Tufts). Tufts is a related party to the Company due to Tufts’ equity ownership in the
Company and because a board member of the Company’s Board of Directors was affiliated with Tufts. The License
Agreement, which was subsequently amended, is exclusive and sub licensable, and will continue in effect on a country
by country basis as long as there is a valid claim of a licensed patent in a country. The Company is committed to pay
license and maintenance fees, prior to commercialization, in addition to low single digit royalties on direct sales and
services and a royalty on sublicense income. During the years ended December 31, 2021, 2020, and 2019, the Company
recorded royalty expense of $1.6 million, $1.1 million and $1.0 million, respectively, in cost of product revenue on the
consolidated statements of operations. During the year ended December 31, 2020, the Company incurred $1.0 million in
cost of collaboration and license revenue owed to Tufts related to sublicensing certain technology and intellectual
property to Abbott Laboratories (Abbott) (see Note 13).
Other licenses
During the year ended December 31, 2012, the Company entered into a license agreement for certain
intellectual property with a third party. The non-exclusive, non-sublicensable third party’s license provides the Company
access to certain patents specifically for protein detection and shall be in effect until the expiration of the last licensed
patent. In consideration for these rights, the Company committed to certain license fees, milestone payments, minimum
annual royalties and a mid-single digit royalty. The Company is required to make mid-single digit royalty payments on
net sales of products and services which utilize the licensed technology. The Company must pay the greater of calculated
royalties on net sales or an annual minimum royalty of $50 thousand. In September 2019, all remaining patents related to
the intellectual property expired and the license agreement terminated. As this agreement was terminated in 2019, the
Company recorded no royalty expense during the years ended December 31, 2021 and 2020. During the year ended
December 31, 2019, the Company recorded royalty expense of $0.8 million in cost of product revenue on the
consolidated statements of operations.
F-30
Legal contingencies
The Company is subject to claims in the ordinary course of business; however, the Company is not currently a
party to any pending or threatened litigation, the outcome of which would be expected to have a material adverse effect
on its financial condition or the results of its operations. The Company accrues for contingent liabilities to the extent that
the liability is probable and estimable.
10. Notes payable
Loan agreement
On April 14, 2014, the Company executed a loan agreement with a lender, as subsequently amended. As of
December 31, 2021, there were no additional amounts available to borrow under the debt facility. The interest rate on
this term loan is variable based on the greater of 8% or 8% plus the prime rate less 5.25%. Interest is paid monthly
beginning the month following the borrowing date. At loan inception and in connection with the amendments, the
Company issued the lender warrants to purchase shares of stock. The loan agreement also contains prepayment penalties
and an end of term charge. Fees incurred upon execution of the agreements, and the fair value of warrants on the date of
grant were accounted for as a reduction in the book value of debt and accreted through interest expense, using the
effective interest rate method, over the term of the debt. Under the amended agreement, the Company was required to
pay the loan principal in four equal installments starting July 1, 2021, with the final payment and end of term charge to
be made on October 1, 2021. On October 1, 2021, the Company made the final principal payment, including end of term
fees, of $2.0 million related to the loan agreement.
11. “At-the-market offering”
On March 19, 2019, the Company entered into the Sales Agreement with Cowen with respect to an “at-the-
market” offering program under which the Company could offer and sell, from time to time at its sole discretion, shares
of its common stock, having an aggregate offering price of up to $50.0 million through Cowen as its sales agent.
On June 5, 2019, the Company issued approximately 2.2 million shares of common stock at an average stock
price of $22.73 per share pursuant to the terms of the Sales Agreement. The “at-the-market” offering resulted in gross
proceeds of $49.7 million. The Company incurred $1.7 million in issuance costs associated with the “at-the-market”
offering, resulting in net proceeds to the Company of $48.0 million. On August 6, 2020, the Company delivered written
notice to Cowen to terminate the Sales Agreement, which termination the parties agreed to make immediately effective.
12. Underwritten public offerings
On August 8, 2019, the Company entered into an underwriting agreement with J.P. Morgan and Leerink, as
representatives of the several underwriters, relating to an underwritten public offering of approximately 2.7 million
shares of the Company’s common stock, par value $0.001 per share. The underwritten public offering resulted in gross
proceeds of $69.0 million. The Company incurred $4.5 million in issuance costs associated with the underwritten public
offering, resulting in net proceeds to the Company of $64.5 million.
On August 6, 2020, the Company entered into an underwriting agreement with Leerink and Cowen, as
representatives of the several underwriters, relating to an underwritten public offering of approximately 3.0 million
shares of the Company’s common stock, par value $0.001 per share. The underwritten public offering resulted in gross
proceeds of $97.6 million. The Company incurred $6.2 million in issuance costs associated with the underwritten public
offering, resulting in net proceeds to the Company of $91.4 million.
On February 3, 2021, the Company entered into an underwriting agreement with Goldman Sachs, Leerink, and
Cowen, as representatives of the several underwriters, relating to an underwritten public offering of
approximately 4.1 million shares of the Company’s common stock, par value $0.001 per share. The underwritten public
F-31
offering resulted in gross proceeds of $287.5 million. The Company incurred $17.8 million in issuance costs associated
with the underwritten public offering, resulting in net proceeds to the Company of $269.7 million.
13. Collaboration and license arrangements
The Company has entered into certain licenses with other companies for use of the Company’s technology.
These licenses have royalty components which the Company earns and recognizes as collaboration and license revenue
throughout the year. The Company recognized revenue of less than $0.1 million for the years ended December 31, 2021,
2020, and 2019 associated with these licenses.
During the year ended December 31, 2020, the Company recognized $1.2 million of previously deferred
revenue as a result of entering into a license agreement with a diagnostics company. As of December 31, 2021 and 2020,
the Company had $0.5 million of deferred revenue related to ongoing negotiations with a diagnostics company.
Abbott Laboratories
On September 29, 2020, the Company entered into a Non-Exclusive License Agreement (the Abbott License
Agreement) with Abbott. Pursuant to the terms of the Abbott License Agreement, the Company granted Abbott a non-
exclusive, worldwide, royalty-bearing license, without the right to sublicense, under the Company’s bead-based single
molecule detection patents (Licensed Patents) in the field of in vitro diagnostics. Abbott has paid the Company an initial
license fee of $10.0 million in connection with the execution of the Abbott License Agreement, which was recognized as
license revenue for the year ended December 31, 2020. Abbott has also agreed to pay the Company milestone fees subject
to the achievement by Abbott of certain development, regulatory and commercialization milestones and low single-digit
royalties on net sales of licensed products.
The Abbott License Agreement includes customary representations and warranties, covenants and
indemnification obligations for a transaction of this nature. The Abbot License Agreement became effective upon
signing and will continue until expiration of the last-to-expire Licensed Patent, or the agreement is earlier terminated.
Under the terms of the Abbott License Agreement, the Company and Abbott each have the right to terminate the
agreement for uncured material breach by, or insolvency of, the other party. Abbott may also terminate the Abbott
License Agreement at any time without cause upon 60 days’ notice.
During the year ended December 31, 2021 and 2020, the Company recognized no revenue and $10.0 million,
respectively, within collaboration and license revenue related to the initial license fee under the Abbott License
Agreement.
14. Employee benefit plans
The Company sponsors a 401(k) savings plan for employees. The Company may make discretionary
contributions for each 401(k) plan year. During the years ended December 31, 2021, 2020, and 2019, the Company made
contributions of $1.1 million, $0.7 million, and $0.5 million, respectively.
15. Business combinations
UmanDiagnostics AB
On August 1, 2019, the Company completed its acquisition of Uman for an aggregate purchase price of $21.2
million, comprised of (i) $15.7 million in cash plus (ii) 191,152 shares of common stock (representing $5.5 million
based on the closing prices of the Company’s common stock on the Nasdaq Global Market on July 1, 2019 and
August 1, 2019, the dates of issuance). The acquisition of Uman closed with respect to 95% of the outstanding shares of
capital stock of Uman on July 1, 2019 and with respect to the remaining 5% of the outstanding shares of capital stock of
Uman on August 1, 2019.
F-32
Uman supplies Nf-L antibodies and ELISA kits, which are widely recognized by researchers and
biopharmaceutical and diagnostics companies world-wide as the premier solution for the detection of Nf-L to advance
the development of therapeutics and diagnostics for neurodegenerative conditions. With the acquisition of Uman, the
Company has secured a long-term source of supply for a critical technology. This acquisition was considered a business
acquisition for accounting purposes.
The Company has accounted for the acquisition of Uman as a purchase of a business under U.S. GAAP. Under
the acquisition method of accounting, the assets and liabilities of Uman are recorded as of the acquisition date of July 1,
2019, at their respective fair values, and consolidated with those of the Company. Purchase consideration in excess of
the amounts recognized for the net assets acquired was recognized as goodwill and is not expected to be tax deductible
in any taxing jurisdiction.
The following table summarizes the acquisition accounting, net of $1.2 million in cash and cash equivalents
acquired (in thousands):
Purchase price:
Cash and stock paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cash and cash equivalents acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase price, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,217
1,221
19,996
Assets (liabilities) acquired:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaids and other current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expense and other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
638
1,680
114
33
13,450
8,111
(20)
(871)
(3,139)
19,996
Revenue and net income related to Uman’s operations were $1.8 million and $0.1 million, respectively for the
year ended December 31, 2021, and is included in the Company’s consolidated statement of operations. Revenue and net
loss related to Uman’s operations were $1.5 million and $0.1 million, respectively, for the year ended December 31,
2020, and is included in the Company’s consolidated statement of operations. Revenue and net income related to
Uman’s operations were $1.1 million and less than $0.1 million, respectively, for the six months following the July 1,
2019 acquisition date, and is included in the Company’s consolidated statements of operations for the year ended
December 31, 2019.
The following unaudited pro forma information presents the condensed consolidated results of operations of the
Company and Uman for the year ended December 31, 2019, as if the acquisition of Uman had been completed on
January 1, 2018. These pro forma condensed consolidated financial results have been prepared for comparative purposes
only and include certain adjustments that reflect pro forma results of operations, such as increased amortization for the
fair value of acquired intangible assets, increased cost of sales related to the inventory valuation adjustment, and
adjustments relating to the tax effect of combining the Company and Uman businesses.
F-33
The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings which may
result from the consolidation of the operations of the Company and Uman. Accordingly, these unaudited pro forma
results are presented for informational purposes only and are not necessarily indicative of the results of operations that
actually would have been achieved had the acquisition occurred as of January 1, 2018, nor are they intended to represent
or be indicative of future results of operations (in thousands):
Revenue (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Pre-tax loss (unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
December 31, 2019
57,597
(38,636)
Year Ended
During the year ended December 31, 2021 and 2020, the Company incurred no costs associated with the
acquisition of Uman. During the year ended December 31, 2019, the Company incurred $1.9 million in costs associated
with the acquisition of Uman. Costs associated with the acquisition of Uman are recorded as selling, general, and
administrative expenses within the consolidated statements of operations.
16. Goodwill and intangible assets
The changes in the carrying amount of goodwill are as follows (in thousands):
Balance as of December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance as of December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Goodwill
10,460
(828)
9,632
Acquired intangible assets consist of the following (dollars in thousands):
Know-how . . . . . . . . . . . . . .
Developed technology. . . . .
Customer relationships . . . .
Non-compete agreements . .
Trade names . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . .
Know-how . . . . . . . . . . . . . .
Developed technology. . . . .
Customer relationships . . . .
Non-compete agreements . .
Trade names . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . .
Estimated
Useful
Life (in years)
$
8.5
7
8.5 - 10
5.5
3
$
Estimated
Useful
Life (in years)
8.5
$
7
8.5 - 10
5.5
3
$
Gross Carrying Accumulated Translation Net Carrying
Weighted Average
Value
Amortization Adjustment
Value
December 31, 2021
Cumulative
13,000
1,650
1,360
340
50
16,400
$
$
(3,825) $
(1,277)
(792)
(170)
(50)
(6,114) $
241
—
2
5
—
248
December 31, 2020
Cumulative
Life Remaining (in years)
6.0
3.1
6.1
3.0
—
$
9,416
373
570
175
—
$ 10,534
Gross Carrying Accumulated Translation Net Carrying
Weighted Average
Value
Amortization Adjustment
13,000
1,650
1,360
340
50
16,400
$
$
(2,296) $ 1,374
—
(1,036)
12
(618)
31
(102)
—
(49)
(4,101) $ 1,417
Value
$ 12,078
614
754
269
1
$ 13,716
Life Remaining (in years)
7.0
4.1
7.1
4.0
0.1
The Company recorded amortization expense of $2.0 million, $2.1 million, and $1.4 million for the years ended
December 31, 2021, 2020, and 2019, respectively. Amortization of developed technology is recorded within research
and development expenses, amortization of customer relationships is recorded within selling, general, and administrative
expenses, amortization of trade names is recorded within selling, general, and administrative expenses, amortization of
non-compete agreements is recorded within selling, general, and administrative expenses, and amortization of know-how
is recorded within cost of goods sold.
F-34
Future estimated amortization expense of acquired intangible assets as of December 31, 2021 is as follows
(amounts in thousands):
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total amortization expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
As of December 31, 2021
1,930
1,848
1,733
1,618
1,589
1,816
10,534
17. Related party transactions
As described in Note 9, in June 2007, the Company entered into a license agreement for certain intellectual
property with Tufts. Tufts is a related party to the Company due to Tufts’ equity ownership in the Company and because
a board member of the Company’s Board of Directors was affiliated with Tufts. During the years ended December 31,
2021, 2020, and 2019, the Company recorded royalty expense of $1.6 million, $1.1 million, and $1.0 million,
respectively, in cost of product revenue on the consolidated statements of operations. During the year ended
December 31, 2020, the Company also incurred $1.0 million in cost of collaboration and license revenue owed to Tufts
related to sublicensing certain technology and intellectual property to Abbott.
During the year ended December 31, 2017, Harvard University became a related party because a member of the
Company’s Board of Directors is affiliated with Harvard University. Revenue recorded from sales to Harvard University
was $0.2 million, $0.1 million, and $0.1 million for the years ended December 31, 2021, 2020, and 2019, respectively.
On November 28, 2018, the Company entered into a sponsor agreement with Powering Precision Health (PPH),
a 501(c)(6) not-for-profit entity of which an executive of the Company is a board member, through December 31, 2018.
The agreement committed a maximum of $120,000 in funds and services to be provided to PPH for the term of the
agreement. On November 14, 2019, the Company entered into the first amendment to the PPH sponsorship agreement.
The agreement amended the $120,000 annual committed maximum amount to $200,000 for the annual committed
amount. The agreement is terminable by either party and does not bind the Company to beyond the term of the
agreement. For the years ended December 31, 2021 and 2020, the Company did not make any contributions. For the year
ended December 31, 2019, the Company had total contributions of $0.1 million.
18. Subsequent events
On January 28, 2022, the Company entered into a multi-year lease agreement for approximately 53,000 square
feet of new principal office space and approximately 32,770 square feet of new laboratory space in Bedford,
Massachusetts. The initial lease term is eight years and nine months beginning on the earlier of the Company occupancy,
or May 1, 2022. The Company was required to provide an initial security deposit of $0.9 million, which was provided in
a form of a letter of credit to the landlord during 2021, and is included in the Company’s restricted cash balance as of
December 31, 2021. The security deposit is scheduled to be reduced to $0.5 million after 60 months.
F-35
Stock Performance Graph
The following performance graph compares the performance of our common stock to the Nasdaq Composite Index
and to the Nasdaq Biotechnology Index from December 7, 2017 (our first day of trading) through December 31,
2021. The comparison assumes $100 was invested in our common stock and in each of the foregoing indices after
the market closed on December 7, 2017, and it assumes reinvestment of dividends, if any. The stock price
performance included in this graph is not necessarily indicative of, nor is it intended to forecast, future stock price
performance.
Compare Cumulative Total Return Among Quanterix,
NASDAQ Composite Index and NASDAQ Biotechnology
Index Since 12/7/2017
$400
$300
$200
$100
$-
Quanterix
NASDAQ Composite Index
NASDAQ Biotechnology Index
Directors
Stock Listing
E. Kevin Hrusovsky
Executive Chairman of the Board of Directors
Our common stock is traded on The Nasdaq Global
Market under the symbol QTRX.
Masoud Toloue, Ph.D
President and Chief Executive Officer, Quanterix
Corporation
Keith L. Crandell
Managing Director, ARCH Venture Partners
Sarah E. Hlavinka
Senior Vice President, General Counsel and
Secretary of Itron, Inc.
Martin D. Madaus, Ph.D.
Operating Executive, The Carlyle Group
Paul M. Meister
Co-Founder, and Chief Executive Officer, Liberty
Lane Partners, LLC
Laurie Olson
Director, Karuna Therapeutics
David R. Walt, Ph.D.
Faculty Member, Harvard Medical School
Executive Officers
Masoud Toloue,. Ph.D
President and Chief Executive Officer
Annual Meeting
The annual meeting of stockholders will be held
virtually on Thursday, June 23, 2022 at 10:00 a.m.
ET.
Internet Website
www.quanterix.com
Investor Information
You may obtain a copy of any of the exhibits to our
Annual Report on Form 10-K free of charge. These
documents are available on our website at
www.quanterix.com or by contacting Investor
Relations at ir@quanterix.com or at:
Investor Relations
Quanterix Corporation
900 Middlesex Turnpike, Building 1
Billerica, Massachusetts 01821
Telephone: (617) 301-9400
Independent Registered Public Accounting Firm
E. Kevin Hrusovsky
Executive Chairman of the Board of Directors
Ernst & Young LLP
Boston, Massachusetts
Michael Doyle
Chief Financial Officer
John Fry
General Counsel and Secretary
Transfer Agent and Registrar
Computershare Trust Company, N.A.
P.O. Box 50500
Louisville, Kentucky 40233
Quanterix Corporation
(617) 301-9400
www.quanterix.com