10-K: Akoya Biosciences Faces Uncertainty Despite Spatial Biology Leadership; Merger with Quanterix Pending

Akoya Biosciences reports a net loss for 2024 but highlights its leading position in the spatial biology market and a pending merger with Quanterix.

Summary

• Akoya Biosciences, a spatial biology company, reported a decrease in total revenue from $96.6 million in 2023 to $81.7 million in 2024.
• The company incurred net losses of $55.4 million in 2024, compared to $63.3 million in 2023.
• As of December 31, 2024, Akoya had 1,330 instruments installed, a 12% increase over 2023.
• Akoya entered into a merger agreement with Quanterix in January 2025, expected to close in the second quarter of 2025, subject to customary closing conditions.
• Quanterix stockholders will own approximately 70%, and Akoya stockholders will own approximately 30%, of the combined company on a fully diluted basis.
• The company's ability to continue as a going concern is dependent upon becoming profitable or obtaining necessary capital.
• Akoya is subject to financial covenants under its Midcap Trust Term Loan, which it may not be able to meet.
• The company's growth strategy includes leveraging sales and marketing, investing in new applications, forming analysis software partnerships, and investing in clinical developments.
• Akoya estimates the spatial biology market to be approximately $14 billion, with its current focus on the $7 billion cancer discovery and translational markets.
• The company faces competition from companies like 10x Genomics, Vizgen, and BioTechne.
• Akoya relies on third-party manufacturers for its instruments and reagents, making it vulnerable to supply shortages and price fluctuations.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While Akoya highlights its leadership in the spatial biology market and a pending merger, it also reports a net loss, declining revenue, and concerns about meeting financial covenants. The sentiment is neutral, reflecting both positive and negative aspects.

Positives

• Akoya is an established leader in the spatial biology market with proven products.
• The company offers comprehensive solutions that address the entire continuum from discovery to clinical applications.
• Akoya has relationships with leading biopharma and life science tools companies, top research institutions, and medical centers.
• The company's growth strategy includes leveraging sales and marketing efforts, investing in new applications, and forming analysis software partnerships.
• Akoya's ABS lab is CLIA certified, enabling support for later-stage clinical trial studies.
• The rate of publications with Akoya's technology as a centerpiece has accelerated greatly, with 1,733 peer-reviewed publications as of December 31, 2024, a 49% increase over 2023.

Negatives

• Akoya has incurred significant losses since inception and expects to incur losses in the future.
• The company may be unable to generate sufficient revenue to achieve and maintain profitability.
• Akoya's Midcap Trust Term Loan contains financial covenants that the company may be unable to meet.
• The company has limited capital resources and will likely need additional funding before achieving profitability, raising substantial doubt about its ability to continue as a going concern.
• Akoya's revenue has been primarily generated from sales of its PhenoCycler and PhenoImager platforms and reagents, and a failure to gain market acceptance could materially and adversely impact revenue.
• The company relies on third-party manufacturers, making it vulnerable to supply shortages and price fluctuations.
• The sizes of the markets for Akoya's solutions may be smaller than estimated, limiting its ability to successfully sell its solutions.

Risks

• The fixed exchange ratio in the Quanterix merger agreement will not be adjusted for changes in either company's stock price, creating uncertainty for Akoya stockholders.
• The merger may not be completed due to various conditions, including regulatory approvals and stockholder approvals.
• The announcement and pendency of the merger could cause disruptions in Akoya's business, including diverting management attention and potentially affecting customer and partner relationships.
• Akoya may have difficulty attracting, motivating, and retaining executives and other key employees in light of the potential merger.
• If the merger is not consummated, Akoya may need to raise additional capital to service its debt obligations and fund its operations.
• Future litigation against Akoya or Quanterix could prevent or delay the completion of the merger or result in the payment of damages.
• Akoya's recurring operating losses and accumulated deficit raise substantial doubt about its ability to continue as a going concern.
• The company's success depends on its ability to drive adoption of its PhenoCycler and PhenoImager platforms.
• Akoya faces significant competition in its market, and if it cannot compete successfully, it may be unable to increase or sustain its revenue or achieve profitability.
• The company must develop new products and service offerings, adapt to rapid technological change, and respond to competitors' introductions to remain competitive.
• Akoya may be unable to manage its future growth effectively, which could make it difficult to execute its business strategy.
• The company relies on distributors for sales in certain countries, and their failure to successfully market Akoya's products could adversely affect its business.
• The loss of any member of Akoya's senior management team or its inability to attract and retain highly skilled scientists, engineers, and salespeople could adversely affect its business.
• If Akoya's operating facilities, including those of its third-party manufacturers, become damaged or inoperable, its ability to conduct and pursue its business activities may be jeopardized.
• Akoya's insurance policies are expensive and protect it only from some business risks, leaving it exposed to significant uninsured liabilities.
• Security incidents, loss of data, or modification of information could compromise information related to Akoya's business or prevent it from accessing critical information.
• Seasonality may cause fluctuations in Akoya's revenue and results of operations.
• Public health crises have caused and could cause disruptions to the development of Akoya's platform technologies and products and business interruptions.
• Akoya outsources to a limited number of third-party manufacturers who are dependent upon third-party suppliers, including single source suppliers, making it vulnerable to supply shortages and price fluctuations.
• Akoya forecasts sales to determine requirements for components and materials used in its systems, and if its forecasts are incorrect, it may experience delays in shipments or increased inventory costs.
• Akoya markets certain of its products as Research Use Only (RUO), and if the FDA disagrees with this status, the company may be subject to enforcement activities.
• Akoya is currently subject to, and may in the future become subject to additional, U.S. state and federal, and non-U.S. laws and regulations, industry guidelines, and contracts, imposing obligations on how it collects, stores, uses and processes personal information.
• As Akoya continues to expand its product, technology and service offerings and the applications and uses of its products into new fields, it may become subject to additional government regulations.
• International expansion of Akoya's business exposes it to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States.
• Akoya could be adversely affected by violations of the FCPA and the anti-bribery and anti-corruption laws of the United States or other countries.
• Unfavorable U.S. or global economic conditions could adversely affect Akoya's business, financial condition or results of operations.
• Akoya's employees, consultants, distributors and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, and insider trading.
• Akoya uses biological and hazardous materials that require considerable expertise and expense for handling, storage and disposal and may result in claims against it.
• Akoya may be subject to claims that its employees, consultants or independent contractors have wrongfully used or disclosed trade secrets or other confidential information of their former employers or other third parties or claims asserting ownership of what it regards as its own intellectual property.
• Akoya may become involved in lawsuits to protect or enforce its intellectual property, which could be expensive, time-consuming and unsuccessful.
• Akoya may not be able to protect and enforce its trademarks and trade names, or build name recognition in its markets of interest thereby harming its competitive position.
• Akoya may be subject to claims challenging the ownership or inventorship of its patents and other intellectual property and, if unsuccessful in any of these proceedings, it may be required to obtain licenses from third parties, which may not be available on commercially reasonable terms, or at all, or to cease the development, manufacture and commercialization of one or more of its products.
• Akoya's use of open source software could adversely affect its ability to offer its products and technologies and subject it to possible litigation.
• Akoya has limited foreign intellectual property rights and it may not be able to protect its intellectual property rights throughout the world, which could harm its business, financial condition and results of operations.
• If Akoya is unable to protect the confidentiality of its trade secrets, the value of its technology could be materially adversely affected and its business could be harmed.
• Akoya heavily depends on intellectual property licensed from third parties, including its license agreements with Stanford for its PhenoCycler product, and Revvity (formerly Perkin Elmer, Inc.) for its PhenoImager product, and its licensors may not always act in its best interest.
• If Akoya is unable to obtain and maintain sufficient patent or other intellectual property protection for its technology, including the PhenoCycler and PhenoImager platforms, or if the scope of the intellectual property protection obtained is not sufficiently broad, its competitors could develop and commercialize products and technology similar or identical to ours, and its ability to successfully commercialize its products and its technology may be impaired.
• Patent terms may be inadequate to protect Akoya's competitive position on its products for an adequate amount of time.
• Akoya's rights to develop and commercialize its products and technologies are subject, in part, to the terms and conditions of licenses granted to it by others.
• Akoya's products are dependent on intellectual property it licenses from third parties. If it fails to comply with its obligations under its intellectual property licenses, if the licenses are terminated, or if disputes regarding these licenses arise, it could lose significant rights that are important to its business and could interfere with its ability to operate its business.
• Issued patents covering Akoya's products and technologies could be found invalid or unenforceable if challenged or unenforceable if challenged in court or before administrative bodies in the United States or abroad, which could harm its business, financial condition and results of operations.
• Akoya may not be aware of all third-party intellectual property rights potentially relating to its products.
• Akoya may be subject to claims challenging the ownership or inventorship of its patents and other intellectual property and, if unsuccessful in any of these proceedings, it may be required to obtain licenses from third parties, which may not be available on commercially reasonable terms, or at all, or to cease the development, manufacture and commercialization of one or more of its products.

Future Outlook

Akoya plans to continue growing its business while improving results of operations in an effort to achieve cash flow positivity, including attracting and retaining qualified personnel, marketing and selling new and existing solutions and services, investing in processes and infrastructure to scale its business, supporting research and development to introduce new solutions, expanding, protecting and defending its intellectual property, and acquiring complementary businesses or technologies to support the growth of its business.

Industry Context

The spatial biology market is estimated to be approximately $14 billion and is a key area of focus for researchers and clinicians alike as spatial phenotyping is able to measure protein and cellular interactions, while maintaining spatial context within a selected tissue sample.

Comparison to Industry Standards

• The document mentions several competitors including 10x Genomics, Vizgen, BioTechne, Bruker, Miltenyi Biotec, and Standard BioTools.
• A JAMA Oncology publication in 2019 established the predictive power of spatial biomarker technologies in predicting response to immuno-oncology therapeutics versus the current technologies such as gene expression, NGS and standard diagnostic PD-L1 biomarker assays.
• A Nature publication in 2021 showed that Akoyas spatial approach found topological differences in the tumor microenvironment, so that patients can be stratified correctly into cohorts for immunotherapy based on responders and non-responders while RNA-seq and other methods could not.
• In 2023, a Gen Biotechnology publication featured the first 100+ protein plex whole-slide image using Akoyas technology.

Related Party Transactions

• Argonaut Manufacturing Services Inc. (AMS) is a portfolio company of Telegraph Hill Partners, which holds greater than 5% of the Companys total outstanding shares.
• During the years ended December 31, 2024 and 2023, the Company incurred costs of goods sold of approximately $3,541 and $7,581, respectively, related to sales of consumables manufactured by and shipped from AMS.
• One of the Companys officers is a member of the board of directors of a software-as-a-service provider, who provides software development services to the Company, which are utilized for research purposes.
• During the years ended December 31, 2024 and 2023, the Company incurred research and development expenses of approximately $677 and $406, respectively, with such provider.

Stakeholder Impact

• The merger with Quanterix will result in Akoya stockholders owning approximately 30% of the combined company.
• The company's financial performance and ability to continue as a going concern could impact employees, customers, and suppliers.
• The company's ability to innovate and compete in the spatial biology market will affect its long-term prospects for all stakeholders.

Next Steps

• The merger with Quanterix is expected to close in the second quarter of 2025, assuming satisfaction of all conditions.
• Akoya plans to continue growing its business while improving results of operations in an effort to achieve cash flow positivity.

Key Dates