NEW YORK (360Dx) – T2 Biosystems reported after the close of the market on Thursday that its third quarter revenues were essentially flat year over year, despite a 27 percent jump in product revenues.
For the three months ended Sept. 30, the firm recorded total revenues of $1.1 million, the same as a year ago, and even with the consensus Wall Street estimate. Product revenues climbed to $739,000 from $580,000 in Q3 2016, but research revenues slid 27 percent to $369,000 from $504,000.
T2 Bio President and CEO John McDonough said in a statement that the firm's operating progress in the recently completed quarter "was one of the best we have had" and noted revenues were in line with the company's guidance. Product revenues were "slightly behind" because of orders that were received late in the quarter that could not be shipped before the quarter ended.
On a conference call to discuss the results, McDonough said that the firm also saw a delay in orders from some customers in the Texas area "that may have been the result of weather." Those orders closed in October, however.
Company highlights in the quarter included a $20.1 million equity raise, as well as a 510(k) submission to the US Food and Drug Administration of its T2Bacteria Panel, which received CE marking in July. The firm also said that it has secured contracts with seven new hospitals internationally, primarily to implement the T2Candida Panel. It secured contracts with three US hospitals to implement the T2Bacteria Research Use Only Panel.
As of the end of September, the firm has 56 contracts in place covering 144 hospitals that provide access to about 473,000 high-risk patients that could be screened with T2Candida and T2Bacteria, McDonough said.
"T2Bacteria remains a very important product and key driver for future growth for our company," he said. "We believe the availability of T2Bacteria along with T2Candida and the T2Dx instrument represent a game-changer in the market and will be the first comprehensive rapid diagnostic sepsis solution that, combined with the standard of care, may enable approximately 95 percent of all patients with a sepsis pathogen infection to be treated with the right targeted therapy as quickly as six hours after blood is drawn."
He added that hospital emergency departments could be a "strong initial beachhead" to drive adoption of the firm's technologies.
The company has entered into a partnership with the US Centers for Disease Control and Prevention to use the T2Dx instrument and the Candida auris Investigational Use Only Panel to rapidly detect the superbug. T2Bio has installed its instruments at CDC, and work to validate the firm's method is under way, which is expected to take 90 days, McDonough said.
Additionally, the firm is conducting a study in Europe on a test that has demonstrated the ability to detect Candida auris directly from patient blood, he noted, and the firm has partnered with Cidara Therapeutics to use the T2Dx platform and the T2 Candida Panel to support clinical trials for the drug firm's antifungal CD101.
T2 Bio increased its Q3 2017 R&D spending 13 percent year over year to $5.9 million from $5.2 million, but trimmed its SG&A costs 5 percent to $5.6 million from $5.9 million.
For the quarter, the company posted a net loss of $14.1 million, or $.45 per share, compared to a net loss of $12.8 million, or $.51 per share, a year ago. It beat the consensus Wall Street estimate of a loss per share of $.49.
T2 Bio ended the third quarter with $52.9 million in cash and cash equivalents.
The company said that total revenues in Q4 2017 are expected to be between $1.1 million and $1.3 million. Product revenue is anticipated to be in the range of $1.0 million to $1.2 million. Research revenue is expected to be about $100,000 during the fourth quarter, it said.
T2 Bio reaffirmed its expectations that the T2Bacteria Panel could be launched in the US by as early as the end of 2017, pending clearance by the FDA. McDonough said that the firm has met with the agency and expects to hear a response from the agency "soon."
In a research note to investors on Friday, Cannacord Genuity's Mark Massaro said that T2Bio has completed a preclinical study for a Lyme disease test and plans to meet with FDA in the coming weeks to design the clinical trial process and protocol. A clinical trial could be initiated during the spring of 2018.
In mid-morning trading on the Nasdaq on Friday, T2 Bio's shares rose more than 10 percent to $4.19.