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BARDA Agreement to Provide up to $69M for T2 Biosystems

NEW YORK – T2 Biosystems said today that it has entered an agreement with the Biomedical Advanced Research and Development Authority (BARDA) of the US Department of Health and Human Services. Under the terms of the agreement, T2 Bio may receive up to $69 million to support further development of its portfolio of diagnostics for sepsis-causing pathogens and antibiotic-resistance genes.

The agreement, described in a filing with the US Securities and Exchange Commission, was the first of three announcements today by the Lexington, Massachusetts-based diagnostics firm.

T2 Bio said that the BARDA funding could support development of a diagnostics portfolio that includes its direct-from-blood panel for detection of biothreat pathogens, such as B. anthracis, F. tularensis, Burkholderia spp., Y. pestis, R. prowazekii, and toxin genes; a separate panel that is expected to cover 99 percent of all bloodborne bacterial infections by means of greater than 36 reported results; and a next-generation high-throughput instrument.

The BARDA Agreement is a cost-sharing contract that consists of an initial base period and seven option periods that BARDA may exercise in its sole discretion and that are subject to T2 Biosystems achieving specified milestones and deliverables. T2 Biosystems will be responsible for a designated portion of the costs associated with each period of work.

Under the terms of the agreement, BARDA may commit $6 million for an initial base period and up to an additional $63 million if it decides to exercise the seven remaining option periods. If all option periods are exercised, the estimated period of performance will be extended until approximately August 2024.

BARDA is entitled to terminate the projects under the agreement at any time and is not obligated to provide continued funding beyond the base contract, T2 Bio said in its filing.

In a separate filing today with the SEC, T2 Bio said that it has entered into an amendment to a term loan agreement that extends the interest-only payment period from Dec. 31, 2020 to Dec. 31, 2021. The amendment reduces the firm's annual product revenue target for 2019 from $9 million to $4 million; for the 24-month period beginning on Jan. 1, 2019 from $95 million to $15 million; and for the 24-month period beginning on Jan. 1, 2020 from $140 million to $43 million.

The final payment fee under the loan agreement was increased from 8 percent to 10 percent of the principal amount of all loans made by the lenders, according to the SEC document.

In a third announcement today, T2 Biosystems said that Premier has awarded it a breakthrough technology contract. As a result, Premier's members can receive special pricing and access to T2 Bio's T2Bacteria Panel and T2Candida Panel. Premier, which is a group purchasing organization that also provides consulting and advocacy services, has a network of more than 4,000 US hospitals and health systems. The contract became effective on Sept. 1.