Quantum

NEW YORK – Quantum-Si is experiencing hiccups as it rolls out its Platinum protein analysis system.

During a Monday conference call following release of the company's Q2 results, CEO Jeff Hawkins said that early customer feedback has led the firm to revamp software for the instrument as well as review its approach to research and development and reconsider the launch of its Carbon sample preparation module.

"Early customer feedback identified a set of software features that were important for our customers to efficiently analyze and interpret their experimental data," Hawkins said. He added that the company delivered an upgraded version of the instrument software in July that aims to address these capability gaps.

Hawkins said that Quantum-Si customers also reported implementation challenges related to sample preparation and different protein sequencing applications they wanted to perform.

Upon looking into these issues, the company "determined that our current R&D strategies and programs were not aligned optimally to our core capabilities and had gaps in terms of addressing the full scope and complexity of the proteomics workflow," he said. "As such, we have initiated a strategic review of current R&D programs and our R&D organizational design."

He said the company plans to implement changes to its R&D system based on this review during Q3.

Hawkins added that customer implementation challenges have led Quantum-Si to reconsider its efforts around its planned automated sample prep instrument, Carbon, which it has put on hold. He suggested that the wide range of sample types and experiments in which the company's customers are interested might make a more flexible sample preparation approach desirable.

He said that while an automated system like Carbon is a streamlined and elegant solution to sample prep, there are challenges to developing it for a wide range of experiment approaches, and existing commercially available liquid-handling platforms might be a more flexible and appropriate solution to sample prep.

"That's really what that evaluation is about," he said.

Quantum-Si reported $205,000 in second quarter revenue.

The bulk of the revenue came from the sales of the company's Platinum protein analysis instrument, which it began selling in Q1 2023. Quantum-Si reported $187,000 in instrument revenue and $18,000 in service revenues in Q2.

The Branford, Connecticut-based proteomic firm did not post any revenues in the year-ago period.

The revenues recognized in Q2 largely reflect sales made in Q1. Quantum-Si said following the release of its Q1 2023 results that it had booked $449,000 in customer orders during that quarter but had only been able to fulfill $251,000 of orders.

It said this week that it exited Q2 with an order backlog of two Platinum instruments. Hawkins also noted on the call that during Q2 the company began to observe "a general lengthening of our customers' capital purchasing process."

Quantum-Si's net loss in the quarter was $25.6 million, or $.18 per share, versus a net loss of $32.4 million, or $.23 per share in Q2 2022.

The company's R&D spending was down 15 percent during the quarter to $15.8 million from $18.5 million in Q2 2022. Its SG&A spending was $11.1 million, down 5 percent from $11.7 million in Q2 2022.

As of June 30, the company had $87.9 million in cash and cash equivalents and $209.3 million in marketable securities.

In Monday morning trading on Nasdaq, Quantum-Si shares were down 34 percent to $2.24.