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 second quarter ended June
30, 2019.
Financing Agreement Highlights:
- The Company entered into two financing agreements that enables
the potential access to up to $60 million of additional capital,
potentially strengthening its financial position.
- Entered into an At-the-Market (ATM) equity offering agreement
with Canaccord Genuity LLC pursuant to which Canaccord will,
at the Company’s option, use reasonable best efforts to sell up to
$30 million of our common stock at our direction.
- Entered into common stock purchase and registration rights
agreements with Lincoln Park Capital Fund, LLC (LPC),
a Chicago-based institutional investor, under which we will
have the right and the sole discretion to sell to LPC up
to $30 million worth of shares over a 36-month period at
market rates based on closing prices in the past 10 days from when
a sales of shares may occur, subject to certain limitations under
the agreement as further described below under the section titled
"Financing Agreement Details".
“We plan to be opportunistic in accessing the
capital markets, including through these agreements, and we may not
sell the full amount under either agreement. We will remain open to
other potential sources of additional capital, both from a
traditional financing perspective and through business development
opportunities. Combined with our plan to reduce our cash burn by
30% by the fourth quarter and our projected capital requirements,
we believe we have a means to efficiently use resources now
available to us to achieve our goals,” said John McDonough, chief
executive officer. “We believe these financing agreements are
consistent with our plan to be strategic in the way we access
capital. In addition, we continue to pursue business development
opportunities as a way to potentially provide non-dilutive cash to
our balance sheet.”
Second Quarter and Recent Business and Financial
Performance Highlights:
- Reported second quarter total revenue of $1.8 million.
- Reported second quarter product revenue of $1.3 million, up 8%
year-over-year, from an increase in T2Bacteria Panel testing
revenue by over 80% from the first quarter.
- Secured 12 new contracts for T2Dx® Instruments in the second
quarter, compared to 9 new contracts in the second quarter of
2018.
- Highlighted products and technology at several medical meetings
during the second quarter, including early, positive T2Bacteria®
Panel clinical data and experience from commercial customers and
data supporting new panel opportunities.
- Published results from T2Bacteria® Panel pivotal clinical study
in the Annals of Internal Medicine® journal; additional
cost-effectiveness data published in peer-reviewed journals.
- Expanded international business by entering exclusive
distribution agreements covering five new markets representing
approximately 1,170 hospitals that could benefit from T2’s
products.
Mr. McDonough added, “During the second quarter T2Bacteria
revenue grew over 80% from the first quarter and we continued to
secure new customer contracts for T2Bacteria, while also assisting
hospitals through the validation and evaluation process so that
they can begin testing patients. All of the new hospitals that have
completed this process in the U.S. and international markets in
2019 are tracking at or above our expectations in terms of
utilization, demonstrating the clinical need for our
direct-from-blood rapid diagnostic tests. In some cases, the sales
cycle and validation process have taken longer than anticipated,
and we are adjusting our product revenue expectations for the year
as a result. We have made changes to our commercial team, strategy
and tactics in the field to accelerate these timelines and remain
confident in the long-term outlook for T2Bacteria growth.”
“We remain excited about potential business
development opportunities that are expected to result in both
research and commercial revenues. Anticipated research revenue
associated with one such opportunity has been impacted by a delay
in the timing of the agreement by about three months. We now expect
the contract to be finalized in the second half of the year and
still expect to realize the full value of the contract into next
year.”
Additional Financial Results:
- Research and grant contribution revenues were $0.5 million in
the second quarter, compared to $2.7 million in last year’s second
quarter.
- Costs and expenses in the second quarter, excluding cost of
product revenue, were $10.8 million, compared to last year’s second
quarter costs and expenses of $11.4 million. Total costs and
expenses include depreciation and non-cash stock compensation of
$2.0 million compared to $4.5 million in last year’s second
quarter, a decrease primarily due to last year’s vesting of
performance-based restricted stock units.
- Operating margin in the second quarter was a loss of $13.8
million, compared to last year’s second quarter operating loss of
$10.9 million.
Weighted average shares outstanding were 44.4 million for the
second quarter, compared to 38.3 million in the same period last
year.
Guidance: The Company is updating its full year
2019 financial guidance as follows:
- Total revenue is expected to be $8.7 million to $9.6 million,
including product revenue of $5.7 million to $6.1 million and
research and grant contribution revenue of $3.0 million to $3.5
million.
- The Company expects to secure contracts of 43 to 53 T2Dx®
Instruments in 2019.
- A combination of cost control efforts and growth in revenue is
expected to reduce quarterly cash burn to below $8 million by the
fourth quarter of 2019. Operating expenses, excluding cost of
product revenue and contingent on closing a research collaboration,
are expected to be $10.5 million to $11.5 million in the third and
fourth quarters of 2019 and $7.0 to $8.0 million absent the
research collaboration in the fourth quarter. Total costs and
expenses will include non-cash depreciation and stock-based
compensation expenses of approximately $1.5 million per quarter. We
will provide a further update on expected fourth quarter operating
expenses at the time of our next earnings release.
- The Company believes that an additional $40 million of capital
is required to get to cash flow breakeven.
Financing Agreement DetailsT2
entered into an At-the-Market (ATM) equity distribution agreement
with Canaccord Genuity LLC. Pursuant to the ATM, Canaccord has
agreed to act as our sales agent and at the Company’s option, use
reasonable best efforts to sell up to an aggregate of $30 million
of our common stock. Sales of common stock, if any, under the ATM
Program will be made by methods deemed to be an “at-the-market”
offering as defined in Rule 415 promulgated under the Securities
Act of 1933, as amended. There is no guarantee that we will be able
to see all or any of the total amount of shares under the ATM.
T2 entered into a common stock purchase agreement
and registration rights agreement (together, the “Agreements”)
with Lincoln Park Capital Fund, LLC (“LPC”),
a Chicago-based institutional investor, for up to $30
million, subject to limitations. Under the terms of the Agreements
and subject to the limitations thereunder, T2 will have the right
and the sole discretion to sell to LPC up to $30
million worth of shares over a 36-month period. T2 will
control the timing and amount of any future investment and LPC will
be obligated to make purchases in accordance with the Agreements
and at the lower of the current market price or the purchase price
looking back at the closing price over the past 10 days and
averaging the 3 lowest prices. There are no upper limits to
the price at which the shares may be sold to LPC. There are
limitations under the agreement as to the number of shares that can
be sold on any day, the price at which they are sold and the total
number of shares that may be sold under the agreement. In
particular, T2 cannot sell more than 20% of its outstanding shares,
or 8,902,661 shares as of today, at a price lower than $1.52 per
share under the Agreement pursuant to Nasdaq rules without first
obtaining shareholder approval, which would equate to $12,908,858
based on the closing price of our common stock on July 29, 2019. If
the share price is above $1.52 per share, this share limitation
does not apply and, subject to other limitations, the Company may
sell up to $30 million worth of shares at the Company’s sole
option.
LPC has agreed not to cause or engage in any manner
whatsoever, in any direct or indirect short selling or hedging of
shares of the Company’s common stock. No warrants, derivatives,
financial or business covenants are associated with the
Agreements. As consideration for the commitment of to
purchase share, T2 has issued 413,349 shares to LPC as a commitment
fee. The Agreements may be terminated by the Company at any
time, at its sole discretion, without any cost or penalty.
This press release does not constitute an offer to
sell or a solicitation of an offer to buy the securities in these
offerings, nor will there be any sale of these securities in any
jurisdiction in which such offer solicitation or sale are unlawful
prior to registration or qualification under securities laws of any
such jurisdiction.
Management Update – Executive Succession
Plan
The Company also announced that founding CEO John
McDonough has been named executive Chairman, effective immediately,
and that the Company is undertaking a national search for a new
CEO. Once that candidate is identified, Mr. McDonough will become
non-executive Chairman of the Board. Mr. McDonough will continue in
the role of CEO and Executive Chairman until his successor is in
place.
Stanley Lapidus, lead independent board member of
T2 Biosystems, said, “On behalf of the board, I would like to thank
John, the founding CEO of our Company, for guiding the company
through its formative stages, initial public offering and early
commercial years. We are particularly proud that under John’s
leadership, the company has created a technology and market with a
whole new approach to diagnostics and has received FDA clearance
for three products that many believed were not possible. It is
gratifying that we have seen the benefits of these products on
patient care in the United States and outside the United States.
The board looks forward to working closely with John as we begin
the process to find the right person to lead the Company through
our next phase of growth. This process could take a number of
months and we will make an announcement when we have a new CEO in
place.”
Mr. McDonough commented, “It is personally the
right time for me and I believe, the right time for T2 to begin the
process of finding a successor for the CEO role. I have been
honored to have worked diligently at the helm for 12 years and I
look forward to working with our Board of Directors in the search
process and fostering a smooth transition to my successor while
moving to the non-executive Chairman role.”
Conference CallManagement 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 1-877-407-9208 (U.S.) or 1-201-493-6784
(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. For more
information, please visit
www.t2biosystems.com.
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 Communications
gkent@vaultcommunications.com 610-455-2763
Investor Contact: Zack Kubow, W2O
Groupzkubow@w2ogroup.com 415-658-6436
T2 BIOSYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands, except share and per share data) (Unaudited)
|
|
June 30,2019 |
|
|
December 31,2018 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
28,422 |
|
|
$ |
50,805 |
|
Accounts receivable |
|
|
1,179 |
|
|
|
1,786 |
|
Inventories |
|
|
3,100 |
|
|
|
2,677 |
|
Prepaid expenses and other current assets |
|
|
713 |
|
|
|
1,340 |
|
Total current assets |
|
|
33,414 |
|
|
|
56,608 |
|
Property and equipment, net |
|
|
7,262 |
|
|
|
7,315 |
|
Operating lease right-of-use
assets |
|
|
4,108 |
|
|
|
— |
|
Restricted cash |
|
|
180 |
|
|
|
180 |
|
Other assets |
|
|
206 |
|
|
|
206 |
|
Total assets |
|
$ |
45,170 |
|
|
$ |
64,309 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Notes payable |
|
$ |
42,885 |
|
|
$ |
42,373 |
|
Accounts payable |
|
|
2,911 |
|
|
|
744 |
|
Accrued expenses and other current liabilities |
|
|
8,823 |
|
|
|
6,073 |
|
Derivative liability |
|
|
2,503 |
|
|
|
2,142 |
|
Deferred revenue |
|
|
677 |
|
|
|
697 |
|
Current portion of lease incentives |
|
|
— |
|
|
|
268 |
|
Total current liabilities |
|
|
57,799 |
|
|
|
52,297 |
|
Lease incentives, net of current
portion |
|
|
— |
|
|
|
492 |
|
Operating lease liabilities, net
of current portion |
|
|
2,893 |
|
|
|
— |
|
Deferred revenue, net of current
portion |
|
|
98 |
|
|
|
133 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’ (deficit)
equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no
shares issued and outstanding at June 30, 2019 and
December 31, 2018 |
|
|
— |
|
|
|
— |
|
Common stock, $0.001 par value; 200,000,000 shares authorized;
44,535,572 and 44,175,441 shares issued and outstanding at
June 30, 2019 and December 31, 2018, respectively |
|
|
44 |
|
|
|
44 |
|
Additional paid-in capital |
|
|
332,301 |
|
|
|
328,514 |
|
Accumulated deficit |
|
|
(347,965 |
) |
|
|
(317,171 |
) |
Total stockholders’ (deficit) equity |
|
|
(15,620 |
) |
|
|
11,387 |
|
Total liabilities and
stockholders’ equity |
|
$ |
45,170 |
|
|
$ |
64,309 |
|
|
|
|
|
|
|
|
|
|
T2 BIOSYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS (In thousands, except share and per share
data) (Unaudited)
|
|
Three Months
EndedJune 30, |
|
|
Six Months
EndedJune 30, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenue |
|
$ |
1,274 |
|
|
$ |
1,220 |
|
|
$ |
2,588 |
|
|
$ |
2,268 |
|
Research revenue |
|
|
71 |
|
|
|
2,711 |
|
|
|
213 |
|
|
|
3,974 |
|
Contribution revenue |
|
|
459 |
|
|
|
— |
|
|
|
788 |
|
|
|
— |
|
Total revenue |
|
|
1,804 |
|
|
|
3,931 |
|
|
|
3,589 |
|
|
|
6,242 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
|
|
4,820 |
|
|
|
3,458 |
|
|
|
9,208 |
|
|
|
6,731 |
|
Research and development |
|
|
4,048 |
|
|
|
3,749 |
|
|
|
7,949 |
|
|
|
8,467 |
|
Selling, general and administrative |
|
|
6,722 |
|
|
|
7,611 |
|
|
|
13,776 |
|
|
|
13,366 |
|
Total costs and expenses |
|
|
15,590 |
|
|
|
14,818 |
|
|
|
30,933 |
|
|
|
28,564 |
|
Loss from operations |
|
|
(13,786 |
) |
|
|
(10,887 |
) |
|
|
(27,344 |
) |
|
|
(22,322 |
) |
Interest expense, net |
|
|
(2,000 |
) |
|
|
(1,506 |
) |
|
|
(3,782 |
) |
|
|
(3,074 |
) |
Other income, net |
|
|
139 |
|
|
|
69 |
|
|
|
332 |
|
|
|
159 |
|
Net loss and comprehensive
loss |
|
$ |
(15,647 |
) |
|
$ |
(12,324 |
) |
|
$ |
(30,794 |
) |
|
$ |
(25,237 |
) |
Net loss per share — basic and
diluted |
|
$ |
(0.35 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.69 |
) |
|
$ |
(0.68 |
) |
Weighted-average number of common
shares used in computing net loss per share — basic and
diluted |
|
|
44,426,402 |
|
|
|
38,263,486 |
|
|
|
44,354,771 |
|
|
|
37,127,208 |
|
T2 Biosystems (NASDAQ:TTOO)
Historical Stock Chart
From Mar 2024 to Apr 2024
T2 Biosystems (NASDAQ:TTOO)
Historical Stock Chart
From Apr 2023 to Apr 2024