T2 Biosystems Reports First Quarter 2019 Financial Results and Provides Corporate Update
May 02 2019 - 4:01PM
Exceeds Q1 Guidance with Delivery of $1.8 Million
in Revenue and 11 New Instrument Contracts
T2 Biosystems, Inc. (NASDAQ:TTOO), a leader in the development and
commercialization of innovative medical diagnostic products for
critical unmet needs in healthcare, announced today the operating
highlights and financial results for the first quarter ended March
31, 2019.
First Quarter and Recent Business and Financial
Performance Highlights:
- Reported first quarter total revenue of $1.8 million.
- Exceeded the high end of first quarter revenue guidance by
20%.
- Reported first quarter product revenue of $1.3 million, up 30%
year-over-year, reflecting an increase in testing volume and stable
capital sales as more new customers selected the reagent rental
model.
- Exceeded guidance with 11 T2Dx® Instruments contracted in the
first quarter, ahead of guidance of 8 to 10 instruments contracted
and compared to 5 instruments in the first quarter of 2018.
- First T2Bacteria® Panel U.S. customers began testing patients
at risk of sepsis related blood stream infections during the first
quarter.
- Received breakthrough device designation for the T2Resistance™
Panel, remaining on track for availability in Europe through CE
Mark and as a research-use-only product in the U.S. in 2019.
- T2Bacteria®, T2Candida® and T2Resistance™ panels featured in
integrated symposium and scientific presentations at the European
Congress of Clinical Microbiology & Infectious Diseases
(ECCMID) in April.
“We delivered a strong start to 2019 with revenue and new system
contracts that surpassed our guidance,” said John McDonough,
president and chief executive officer. “Our commercial team is
building momentum with ongoing and new customers alike, and we are
pleased to be engaging on a more regular basis with motivated
institutions that understand T2Bacteria® Panels’ unique value
proposition and potential to improve clinical outcomes. During the
quarter we also helped several of the first T2Bacteria® Panel
customers in the U.S. complete their training and validation
process and begin testing patients. We are pleased with the initial
feedback and testing volumes and look forward to bringing more
customers online in growing numbers throughout the coming
quarters.”
Additional Financial Results:
- Research and grant contribution revenues were $0.5 million in
the first quarter, compared to $1.3 million in last year’s first
quarter.
- Costs and expenses in the first quarter, excluding cost of
product revenue, were $11.0 million, compared to last year’s first
quarter costs and expenses of $10.5 million. Total costs and
expenses include depreciation and non-cash stock compensation of
$2.6 million compared to $2.0 million in last year’s first quarter,
an increase primarily due to the vesting of performance-based
restricted stock units.
- Operating margin in the first quarter was a loss of $13.6
million, compared to last year’s first quarter operating loss of
$11.4 million.
Weighted average shares outstanding were 44.3 million for the
first quarter, compared to 36.0 million in the same period last
year.
Guidance:
The company is reiterating its full year 2019 financial guidance
and providing second quarter 2019 financial guidance as
follows:
- Total revenue is expected to double in 2019 compared to $10.5
million in 2018, including product revenue growth of over 100%.
Second quarter 2019 total revenue is expected to be in the range of
$1.8 million to $2.1. Second quarter product revenue is expected to
be in the range of $1.5 million to $1.8 million, reflecting
continuing adoption of T2Bacteria® and T2Candida® Panel test sales
and expanding T2Dx® Instruments reagent rentals and sales in the
U.S. and internationally.
- The company expects to secure contracts of 70 to 80 T2Dx®
Instruments in 2019, including 12 to 14 contracts in the second
quarter 2019.
- Operating expenses, excluding cost of product revenue, are
expected to be $10.5 million to $11.5 million in the second quarter
2019. Total costs and expenses will include non-cash depreciation
and stock-based compensation expenses of approximately $3.0
million.
Conference Call
Management will host a conference call today with the investment
community at 4:30 p.m. Eastern Time to discuss the financial
results and other business developments. Interested parties may
access the live call via telephone by dialing 1-855-327-6838 (U.S.)
or 1-631-891-4304 (International). To listen to the live call via
T2 Biosystems' website, go to www.t2biosystems.com, in the
Investors/Events & Presentations section. A webcast replay of
the call will be available following the conclusion of the call,
also in the Investors/Events & Presentations section of the
website.
About T2 Biosystems:T2 Biosystems, a leader in
the development and commercialization of innovative medical
diagnostic products for critical unmet needs in healthcare, is
dedicated to improving patient care and reducing the cost of care
by helping clinicians effectively treat patients faster than ever
before. T2 Biosystems’ products include the T2Dx® Instrument,
T2Candida® Panel, and T2Bacteria® Panel and are powered by the
proprietary T2 Magnetic Resonance (T2MR®) technology. T2 Biosystems
has an active pipeline of future products, including products for
the detection of additional species and antibiotic resistance
markers of sepsis pathogens, and tests for Lyme
disease.
Forward-Looking Statements This press
release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. All
statements contained in this press release that do not relate to
matters of historical fact should be considered forward-looking
statements, including, without limitation, statements regarding
additional patients, timing of testing patients, anticipated
product benefits, strategic priorities, product expansion or
opportunities, growth expectations or targets, timing
of FDA filings or clearances and anticipated operating
expenses, as well as statements that include the words “expect,”
“intend,” “plan”, “believe”, “project”, “forecast”, “estimate,”
“may,” “should,” “anticipate,” and similar statements of a future
or forward looking nature. These forward-looking statements are
based on management's current expectations. These statements are
neither promises nor guarantees, but involve known and unknown
risks, uncertainties and other important factors that may cause
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements, including,
but not limited to, (i) any inability to (a) realize anticipated
benefits from commitments, contracts or products; (b) successfully
execute strategic priorities; (c) bring products to market; (d)
expand product usage or adoption; (e) obtain customer
testimonials; (f) accurately predict growth assumptions; (g)
realize anticipated revenues; (h) incur expected levels of
operating expenses; or (i) increase the number of high-risk
patients at customer facilities; (ii) failure of early data to
predict eventual outcomes; (iii) failure to make or obtain
anticipated FDA filings or clearances within expected time frames
or at all; or (iv) the factors discussed under Item 1A. "Risk
Factors" in the company's Annual Report on Form 10-K for the year
ended December 31, 2018, filed with the U.S. Securities and
Exchange Commission, or SEC, on March 14, 2019, and other filings
the company makes with the SEC from time to time. These and
other important factors could cause actual results to differ
materially from those indicated by the forward-looking statements
made in this press release. Any such forward-looking statements
represent management's estimates as of the date of this press
release. While the company may elect to update such forward-looking
statements at some point in the future, unless required by law, it
disclaims any obligation to do so, even if subsequent events cause
its views to change. Thus, no one should assume that the Company’s
silence over time means that actual events are bearing out as
expressed or implied in such forward-looking statements.
These forward-looking statements should not be relied upon as
representing the company's views as of any date subsequent to the
date of this press release.
Media Contact: Gina Kent, Vault
Communicationsgkent@vaultcommunications.com610-455-2763
Investor Contact: Zack Kubow, W2O Group
zkubow@w2ogroup.com 415-658-6436
T2 BIOSYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS (In thousands, except share and per share
data) (Unaudited)
|
Three Months
EndedMarch 31, |
|
|
2019 |
|
|
2018 |
|
Revenue: |
|
|
|
|
|
|
|
Product revenue |
$ |
1,314 |
|
|
$ |
1,048 |
|
Research revenue |
|
142 |
|
|
|
1,263 |
|
Grant contribution revenue |
|
329 |
|
|
|
— |
|
Total revenue |
|
1,785 |
|
|
|
2,311 |
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of product revenue |
|
4,388 |
|
|
|
3,273 |
|
Research and development |
|
3,901 |
|
|
|
4,718 |
|
Selling, general and administrative |
|
7,055 |
|
|
|
5,755 |
|
Total costs and expenses |
|
15,344 |
|
|
|
13,746 |
|
Loss
from operations |
|
(13,559 |
) |
|
|
(11,435 |
) |
Interest expense, net |
|
(1,782 |
) |
|
|
(1,568 |
) |
Other income, net |
|
194 |
|
|
|
90 |
|
Net
loss and comprehensive loss |
$ |
(15,147 |
) |
|
$ |
(12,913 |
) |
Net
loss per share — basic and diluted |
$ |
(0.34 |
) |
|
$ |
(0.36 |
) |
Weighted-average number of common shares used in computing
net loss per share — basic and diluted |
|
44,282,345 |
|
|
|
35,978,306 |
|
|
|
|
|
|
|
|
|
T2 BIOSYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands, except share and per share data) (Unaudited)
|
|
March 31,2019 |
|
|
December 31,2018 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
37,400 |
|
|
$ |
50,805 |
|
Accounts receivable |
|
|
1,773 |
|
|
|
1,786 |
|
Prepaid expenses and other current assets |
|
|
1,741 |
|
|
|
1,340 |
|
Inventories |
|
|
2,664 |
|
|
|
2,677 |
|
Total current assets |
|
|
43,578 |
|
|
|
56,608 |
|
Property and equipment, net |
|
|
7,128 |
|
|
|
7,315 |
|
Operating lease assets |
|
|
4,463 |
|
|
|
— |
|
Restricted cash |
|
|
180 |
|
|
|
180 |
|
Other assets |
|
|
206 |
|
|
|
206 |
|
Total assets |
|
$ |
55,555 |
|
|
$ |
64,309 |
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
618 |
|
|
$ |
744 |
|
Accrued expenses and other current liabilities |
|
|
7,784 |
|
|
|
6,073 |
|
Derivative liability |
|
|
2,225 |
|
|
|
2,142 |
|
Notes payable |
|
|
42,450 |
|
|
|
42,373 |
|
Deferred revenue |
|
|
658 |
|
|
|
697 |
|
Current portion of lease incentives |
|
|
— |
|
|
|
268 |
|
Total current liabilities |
|
|
53,735 |
|
|
|
52,297 |
|
Lease incentives, net of current portion |
|
|
— |
|
|
|
492 |
|
Operating lease liabilities, net of current portion |
|
|
3,259 |
|
|
|
— |
|
Deferred revenue, net of current portion |
|
|
141 |
|
|
|
133 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Stockholders’ (deficit) equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 10,000,000
shares authorized; no shares issued and outstanding at
March 31, 2019 and December 31, 2018 |
|
|
— |
|
|
|
— |
|
Common stock, $0.001 par value; 200,000,000 shares
authorized; 44,339,243 and 44,175,441 shares issued and outstanding
at March 31, 2019 and December 31, 2018,
respectively |
|
|
44 |
|
|
|
44 |
|
Additional paid-in capital |
|
|
330,694 |
|
|
|
328,514 |
|
Accumulated deficit |
|
|
(332,318 |
) |
|
|
(317,171 |
) |
Total stockholders’ (deficit) equity |
|
|
(1,580 |
) |
|
|
11,387 |
|
Total liabilities and stockholders’ equity |
|
$ |
55,555 |
|
|
$ |
64,309 |
|
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