NEW YORK (360Dx) – T2 Biosystems reported after the close of the market on Thursday that its third quarter revenues jumped 127 percent year over year,
For the three months ended Sept. 30, the company posted revenues of $2.5 million, compared to $1.1 million in the prior-year period, beating the consensus Wall Street estimate of $2.3 million.
Product revenues rose 71 percent to $1.2 million from $739,000 in Q3 2017, and research revenues increased 325 percent to $1.2 million from $369,000 in Q3 2017.
During the recently completed quarter, the company placed 11 new T2Dx instruments and secured 11 new hospital contracts.
T2 Bio CEO John McDonough said in a statement that the firm is "solidly on track and making continual progress with the launch of the T2Bacteria Panel, with robust interest from new customers. The feedback from the first commercial customers has been positive, and we are excited that more and more patients suspected of having sepsis will have access to our potentially lifesaving diagnostic technology."
Overall, the number of placements in the quarter keeps the company on pace to achieve its revenue and placement guidance for 2018, he said. The firm also anticipates that it will deliver on its longer-term, high-growth goal to double its revenue in 2019 and 2020.
In Q3, the firm increased its targeted high-risk patients at newly contracted hospitals by an estimated 77,000.
Further, it continued enrolling patients in a pivotal clinical trial of the T2Lyme Panel and presented new data suggesting the T2Lyme Panel is more accurate than other diagnostic alternatives for identifying Borrelia infections for patients suspected of having early-stage Lyme disease.
On a conference call to discuss financial results, McDonough said that the firm had "a strong start" to the launch of its T2Bacteria panel, cleared by the US Food and Drug Administration in May. "We also remain on track with our product pipeline with several key milestones anticipated over the next 18 months," he said.
Revenues for the current quarter primarily reflect sales of the T2Candida panel and T2Dx instrument because most recent T2Bacteria panel placements are being implemented by customers but those sales have not yet been recorded, he said.
At the end of Q3, T2Bio had 77 instruments placed, or under contract for future placement, in 170 hospitals worldwide. "We estimate that each instrument in the US may generate about [$300,000] in recurring revenue every year when hospitals go live and ramp up testing of patients with T2Bacteria and T2Candida," he said.
Six existing T2Candida panel customers have decided to add T2Bacteria, and the firm anticipates that the majority of the Candida panel customers will add the bacteria panel over time, he said, adding that until its products are recognized as standard tests, the average time to close sales at new hospitals is about 12 months.
He said that the firm continues to enroll patients in an FDA clinical trial for its T2Lyme Diagnostic Panel to evaluate the clinical performance of T2Lyme compared to skin biopsy or detection of the C6 antigen, or both. The firm expects the clinical trial to continue into 2019.
"If approved, we believe T2Lyme could become the standard of care in an approximately $700 million market," McDonough said.
T2Bio has completed a final milestone for development of a T2 gram-negative bacteria resistance diagnostic panel, being developed through a partnership with Allergan and supported by CARB-X, which could become the first ever direct-from-blood antimicrobial resistance panel, he said.
The firm is evaluating the timing and requirements for a clinical trial to support a submission to the FDA.
The firm is also collaborating with the US Centers for Disease Control and Prevention for application of an investigational-use-only T2Candida panel for detection of C. auris in US hospitals.
For Q3 2018, the firm reported a net loss of $10.8 million, or $.25 per share, compared to a net loss of $14.1 million, or $.45 per share, for Q3 2017, and beat the consensus Wall Street estimate for a loss per share of $.33.
T2 Biosystems used 43.8 million shares to calculate its loss-per-share figure in Q3 2018 compared 31.4 million shares in Q3 2017. In June it raised $52.6 million in a public offering of 7 million of its common stock.
T2 Bio's R&D costs in Q3 2018 dropped 54 percent year over year to $2.7 million from $5.9 million, while its SG&A spending increased 5 percent to $5.9 million from $5.6 million.
T2 Bio finished the quarter with $60.2 million in cash and cash equivalents.
For full-year 2018, T2 Bio reiterated its revenue guidance of a range of $10.5 million to $12.0 million, which implies an expectation of $1.8 million to $3.3 million in revenue in the fourth quarter.
Product revenues are anticipated to be between $5 million and $5.9 million and research revenues are expected to be in the range of $5.5 million to $6.1 million.
Prior to the release of earnings, analysts on average anticipated a total of $2.8 million in Q4 and $11.3 million for 2018.
The company anticipates securing placements of 20 to 25 T2Dx Instruments in the second half of 2018, implying that the fourth quarter will include nine to 14 new system contracts. In Q3, it achieved a goal of adding access to 75,000 high-risk patients suspected of sepsis in the second half of 2018. The company said that it expects to add at least 35,000 additional high-risk patients in the fourth quarter.
Leerink analyst Puneet Souda said in a research note today that the T2Bacteria panel addresses an important need for a timely answer in the emergency room by providing a test turnaround time of between three and five hours that enables emergency room clinicians to "make an accurate diagnosis and prescribe the right antibiotic within a clinically relevant timeframe." He noted that T2Bio values the overall emergency department opportunity at about 2 million patients, or $300 million, and is "likely to pursue it first given the acute need."
In early morning trading on the Nasdaq, shares of T2 Biosystems were up more than 8 percent to $5.70.