Executive Summary / Key Takeaways

• Akoya Biosciences is a leader in the rapidly evolving spatial biology market, offering end-to-end solutions for tissue analysis from discovery to clinical applications, underpinned by its PhenoCycler and PhenoImager platforms and a growing installed base.
• Recent financial performance, including Q1 2025 results showing $16.6 million in total revenue and a net loss of $15.7 million, reflects persistent macro pressures on capital equipment sales and volatility in service revenue, despite strong reagent growth and operational cost controls.
• The company has undertaken significant operational efficiency initiatives, including consolidating manufacturing in-house and workforce reductions, which have improved gross margins and reduced operating expenses, positioning it for improved profitability.
• A key strategic focus is the acceleration of the clinical business through partnerships like Acrivon Therapeutics (ACRV) and NeraCare, leveraging the PhenoImager HT platform for companion diagnostics and high-value clinical trial studies, representing a significant future revenue opportunity.
• While facing near-term liquidity challenges, including a going concern doubt and debt covenant issues (addressed by a recent waiver), Akoya is actively evaluating strategic alternatives, aiming for operating cash flow breakeven in 2025, supported by its cost structure and expected revenue trends.

Setting the Spatial Stage

The field of life sciences is undergoing a transformative shift, moving beyond bulk analysis to understand biological processes at the single-cell level within their native tissue context. This is the realm of spatial biology, a rapidly evolving technology enabling researchers to map cell types and biomarkers across whole tissue samples with single-cell resolution. Unlike traditional methods like next-generation sequencing or flow cytometry, which require tissue destruction, spatial biology preserves tissue integrity while providing crucial information about cellular interactions and localized biomarker measurements. This capability is becoming increasingly vital across discovery, translational research, and clinical diagnostics, particularly in complex areas like cancer immunology and neurology.

Akoya Biosciences has positioned itself at the forefront of this market, aiming to provide comprehensive, end-to-end spatial phenotyping solutions. Founded in 2015 and significantly shaped by the 2018 acquisition of Perkin Elmer's (PKE) Quantitative Pathology Solutions division, Akoya offers integrated platforms, reagents, software, and services designed to serve the full continuum of research needs. The company's mission centers on bringing context to biology and human health through the power of spatial phenotyping, a capability it believes is essential for advancing the understanding of disease progression and patient response to therapy.

Akoya's Technological Foundation

Akoya's core technology is built around its PhenoCycler and PhenoImager platforms. The PhenoCycler is designed for ultra-high parameter, high-plex discovery research, capable of interrogating up to 100 biomarkers. The PhenoImager platforms, including the Fusion and HT systems, offer high-throughput, scalable solutions tailored for translational and clinical applications. The PhenoCycler-Fusion system combines the strengths of both, enabling spatial discovery at scale with significant workflow speed improvements.

These platforms offer distinct advantages. The PhenoCycler-Fusion 2.0 upgrade, for instance, allows customers to process twice as many samples per week compared to previous capabilities, establishing it as a high-throughput discovery platform. The PhenoImager HT 2.0 upgrade similarly provides a fivefold increase in workflow speed for translational and clinical users. By the end of 2023, over half of the installed base had received these 2.0 field upgrades, contributing to increased consumable revenue and system pull-through. The annualized reagent pull-through for the PhenoCycler-Fusion reached the low-to-mid $50,000 range in Q2 2024, while the PhenoImager HT was in the high $30,000 range, reflecting increased utilization driven by enhanced capabilities and the demand for high-plex panels.

Beyond hardware, Akoya is expanding its content and software offerings. The PhenoCode catalog of molecular barcodes enables ultrahigh-plex experiments, simplifying panel development. New reagent panels, such as the immuno-oncology focused PhenoCode IO60 (covering 60 biomarkers) and a 24-plex mouse panel for preclinical research, aim to drive system utilization and adoption by providing ready-to-use solutions. Partnerships, like the collaboration with Enable Medicine on the MaxFuse AI algorithm, allow customers to integrate spatial proteomic data with non-spatial single-cell RNA data, creating informatically derived spatial multiomic datasets. These technological advancements and content expansions are central to Akoya's strategy to enhance its competitive moat, drive recurring revenue, and expand into new application areas like neurobiology.

Competitive Landscape

The spatial biology market is dynamic, with several players vying for position. Key competitors include companies like 10x Genomics (TXG), Illumina (ILMN), and Bruker (BRKR), each with varying strengths and market focuses. 10x Genomics is a leader in single-cell and spatial genomics, known for its rapid innovation and large installed base, though it faces profitability challenges. Illumina dominates the broader genomics market and is expanding into spatial omics, leveraging its extensive network but facing regulatory hurdles and slowing core growth. Bruker, through acquisitions like NanoString, is building its presence in proteomics and spatial imaging, benefiting from a broad portfolio but managing integration complexities.

Akoya differentiates itself through its specific focus on proteomic phenotyping using multiplex immunofluorescence, identified by industry reports as a key driver of spatial biology market growth. The company highlights its industry-leading installed base (1,359 systems as of March 31, 2025) and extensive publication record (over 1,578 citing Akoya technology by Q3 2024) as evidence of broad adoption and scientific trust. Akoya positions its PhenoImager HT as the only clinical-grade spatial platform currently being used in biopharma prospective clinical trials, offering technical robustness, sensitivity, reproducibility, and high throughput (over 300 samples per week). This clinical focus, coupled with its end-to-end solutions spanning discovery to diagnostics, provides a distinct competitive angle compared to peers primarily focused on genomics or research-use-only applications. While competitors like Lunaphore (now part of Bio-Techne (TECH)) are increasing their visibility, Akoya believes its technological advantages, such as higher plex capabilities, larger imaging areas, and increased throughput, position it strongly in head-to-head competition, although macro funding constraints remain the overwhelming market challenge.

Strategic Evolution & Operational Efficiency

Recognizing the need to improve financial fundamentals and navigate a challenging market, Akoya has strategically focused on enhancing operational efficiency. A major initiative was the establishment of a new Manufacturing Center of Excellence in Marlborough, Massachusetts. This facility, fully operational by Q2 2024, brought the manufacturing of molecular barcode antibodies and reagents in-house. The goal was to ensure product quality and availability, reduce reliance on third-party suppliers, and improve gross margins. While the transition temporarily impacted reagent fulfillment and delayed some instrument purchases in Q1 2024, the company stated these issues were resolved, and the facility is now contributing to improved margins.

Complementing the manufacturing shift, Akoya implemented significant cost control measures. This included workforce reductions in January and July 2024, resulting in an aggregate reduction of approximately 35% compared to the end of 2023. Facility consolidation, including exiting the Menlo Park, California location in Q1 2024 (leading to impairment charges), further streamlined operations. These efforts are reflected in the financial results, with operating expenses decreasing by 11% in Q1 2025 compared to Q1 2024 (driven by lower personnel and rent costs, partially offset by merger-related professional fees), and a 25% decrease in OpEx in Q3 2024 compared to the prior year period. These operational efficiencies are critical components of the company's path towards profitability.

Recent Financial Performance (Q1 2025 & Trends)

Akoya's recent financial performance reflects the interplay of strategic initiatives, operational changes, and persistent market headwinds. In the first quarter of 2025, total revenue was $16.639 million, a 9% decrease compared to $18.350 million in Q1 2024. This decline was primarily driven by a 26% decrease in Service and Other revenue ($4.607 million vs $6.210 million), largely due to lower lab services and companion diagnostic development revenue. Product revenue saw a minor 1% decrease ($12.032 million vs $12.140 million), with a slight increase in instrument revenue (29 placements vs 30) offset by a small decrease in consumables.

Despite the revenue decline, gross profit increased by 18% to $9.871 million in Q1 2025, resulting in a gross margin of 59%. This improvement was primarily due to a $2.0 million inventory write-off related to discontinued legacy instruments in Q1 2024, which had depressed the prior year's GAAP margin (46% GAAP, 57% non-GAAP adjusted). The Q1 2025 margin reflects the benefits of operational efficiencies and reagent mix, though management expects further expansion in the future.

Operating expenses decreased significantly to $23.283 million in Q1 2025, down from $29.964 million in Q1 2024. This 22% reduction was largely due to lower personnel costs from workforce reductions, reduced rent from facility consolidation, and the absence of impairment and restructuring charges recorded in Q1 2024 ($2.971 million impairment, $1.397 million restructuring). The loss from operations consequently narrowed to $13.412 million in Q1 2025, a substantial improvement from $21.585 million in Q1 2024. The net loss for Q1 2025 was $15.652 million, compared to $23.484 million in Q1 2024.

These results highlight a mixed picture: while cost controls and margin improvements are taking hold, top-line growth remains pressured by external factors, particularly impacting instrument sales and certain service lines.

Liquidity and Financial Health

As of March 31, 2025, Akoya had cash, cash equivalents, and marketable securities totaling $27.544 million. The company used $7.214 million in cash from operating activities during the three months ended March 31, 2025. This cash burn, coupled with historical losses and an accumulated deficit of $301.088 million as of March 31, 2025, raises concerns about the company's ability to fund operations.

A critical factor impacting liquidity is the company's long-term debt under the Midcap Trust Term Loan. As of March 31, 2025, the outstanding debt (net of debt discount) was $76.487 million. Due to non-compliance with certain financial covenants at March 31, 2025, and the expectation of not maintaining compliance at July 31, 2025 (if the merger is not consummated), the entire amount of the Midcap Trust Term Loan was classified as a current liability. This classification underscores substantial doubt about the company's ability to continue as a going concern for the next twelve months, absent successful mitigation efforts or the completion of the merger.

The company has historically relied on equity financing, debt, and revenue to fund operations. While an At-the-Market (ATM) offering program for up to $50 million was established in November 2022, no shares have been sold under this program as of March 31, 2025. Recent developments include entering into a Merger Agreement with Quanterix Corporation (QTRX) and securing a Securities Purchase Agreement for up to $30 million in convertible notes from Quanterix, drawable under certain conditions. Furthermore, on May 12, 2025, the company entered into an amendment with Midcap Financial Trust, which waived existing events of default as of March 31, 2025, and amended certain financial covenants, bringing the company back into compliance as of that date. These actions provide some near-term relief but the underlying liquidity risk remains significant, particularly if the merger is not consummated.

Clinical Momentum & Partnerships

A key strategic pillar for Akoya is the expansion of its clinical business, leveraging the PhenoImager HT platform's capabilities for translational and diagnostic applications. The company's Advanced Biopharma Solutions (ABS) lab services business has seen a rapid transition towards higher-value, longer-term clinical trial studies, making up approximately 90% of ongoing programs by Q2 2024. This shift is reflected in the growth of service revenue in prior periods, although Q1 2025 saw a temporary decline in this area.

Significant partnerships underpin this clinical strategy. The collaboration with Acrivon Therapeutics on the ACR-368 OncoSignature assay, deployed on the HT platform, is a prime example. Promising Phase IIb clinical data presented in April 2024, showing a 50% confirmed objective response rate in OncoSignature positive patients versus 0% in negative patients, highlights the assay's potential as a precision diagnostic. The assay has received Breakthrough Device Designation from the FDA, coupled with Fast Track designation for the therapeutic, positioning this partnership as a potential path to Akoya's first commercially launched companion diagnostic.

New partnerships further expand the clinical reach. The agreement with NeraCare focuses on personalized therapy selection for early-stage melanoma using the Immunoprint assay on the HT platform. This aims to identify high-risk patients who could potentially benefit from therapies typically administered in later stages, representing a significant market expansion opportunity and a catalyst for new biopharma collaborations. In China, the partnership with Shanghai KR Pharmtech resulted in NMPA approval for the KR-HT5 instrument (based on the HT), enabling its use in hospital settings and providing a pathway for Class III assay approval with clinical validation. These clinical initiatives are viewed by management as significant potential contributors to future revenue and shareholder value, complementing the core research business.

Outlook and Path Forward

Akoya's outlook is characterized by a commitment to achieving profitability despite ongoing market challenges. Following Q3 2024 results, management updated the full-year 2024 revenue guidance to a range of $80 million to $85 million, reflecting continued pressure on customer spending and volatility in instrument placements. This revised outlook suggested that achieving operating cash flow breakeven by the end of 2024 would likely be missed, with expectations shifting to adjusted EBITDA in the low single-digits for Q4 2024 and cash breakeven "going into next year" (2025).

The path forward hinges on several factors: continued growth in reagent revenue driven by the expanding installed base, increased pull-through from 2.0 upgrades and new content, and contributions from the accelerating clinical trial and companion diagnostic partnerships. Management's assumptions for a return to growth in 2025 are based on these fundamental drivers and cost controls, rather than relying on a significant recovery in the broader funding environment.

The company's strategic focus remains clear: drive system utilization and revenue growth through platform improvements and content expansion, advance the clinical pipeline, and achieve profitability goals through operational efficiency and gross margin expansion. The evaluation of strategic alternatives is ongoing, aimed at identifying the optimal path for sustainable growth and maximizing shareholder value in the current environment.

Risks

Investing in Akoya Biosciences involves significant risks. The substantial doubt about the company's ability to continue as a going concern, highlighted by the classification of its debt as current liability, is a primary concern, contingent on the outcome of the pending merger and the ability to secure alternative financing or waivers if needed. The proposed merger with Quanterix Corporation itself carries risks, including the possibility of termination, uncertainty regarding the value of the stock consideration (due to a fixed exchange ratio and share/cash limits), and potential integration challenges.

Persistent macro-economic headwinds impacting capital equipment purchases, elongated sales cycles, and volatility in customer spending could continue to pressure revenue growth. Competition in the spatial biology market is intense, and while Akoya believes it has differentiated technology and market positioning, rivals could introduce competing products or pricing strategies that impact market share and margins. The company's reliance on single-source suppliers for certain components and contract manufacturers also poses supply chain risks. Furthermore, changes in trade policies, regulatory environments (including potential impacts on NIH funding or FDA processes), and the ability to protect intellectual property represent ongoing challenges.

Conclusion

Akoya Biosciences operates at the cutting edge of spatial biology, a field poised for significant growth as researchers and clinicians seek deeper insights into tissue microenvironments. The company has built a substantial installed base and a differentiated technology platform spanning discovery to clinical applications, supported by a growing portfolio of reagents and strategic partnerships. Recent operational efficiency initiatives have improved the cost structure and gross margins, laying a foundation for improved profitability.

However, the company faces material near-term challenges, including significant liquidity concerns underscored by a going concern doubt and debt obligations. While strategic actions like the potential merger with Quanterix Corporation, convertible note financing, and debt waivers aim to address these issues, their outcomes remain uncertain. The investment thesis hinges on Akoya's ability to navigate these financial and macro headwinds while successfully executing its strategy to drive reagent pull-through, capitalize on the accelerating clinical opportunities, and achieve its goal of operating cash flow breakeven in 2025. The progress on clinical partnerships and the benefits derived from operational efficiencies offer potential catalysts, but the inherent risks in the current market and financial position warrant careful consideration by investors.