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T2 Biosystems Preliminary Q1 Revenues Spike; Firm Suspends 2020 Guidance, Licenses COVID-19 Test

NEW YORK – T2 Biosystems on Tuesday said that its preliminary first quarter revenues are expected to grow 22 to 44 percent year over year.

Due to the coronavirus pandemic, it also said that it will suspend its 2020 guidance, while adding it has licensed a SARS-CoV-2 test to be adapted to its rapid diagnostics platform.

For the quarter ending March 31, T2 estimates first quarter total revenue will be in the range of $2.2 million to $2.6 million compared to $1.8 million for the first quarter of 2019. The consensus Wall Street revenue estimate for Q1 is $3.1 million.

Estimated first quarter product revenue is expected to be in the range of $900,000 to $1.1 million compared to $1.3 million in the prior-year period.

Estimated first quarter research and grant contribution revenues are expected to be in the range of $1.3 million to $1.5 million compared to $500,000 a year ago.

Cash and cash equivalents as of March 31, 2020 are expected to be approximately $30.0 million.

"As a result of impacts from the COVID-19 pandemic, we recently began to experience disruption to our commercial operations," T2 Bio CEO John Sperzel noted in a statement. "We are unsure of the magnitude or duration of these impacts in 2020, and we are making the necessary adjustments to minimize impact to our business," he said.

Due to uncertainty related to the pandemic, T2 Bio has also suspended its financial and operational guidance for 2020. The company expects to provide complete first quarter financial results in early May.

Also on Tuesday, Hackensack Meridian Health and T2 Bio announced that T2 will license HMH's Center for Discovery and Innovation's (CDI) assay to detect SARS-CoV-2 infections.

Under the agreement, the assay will be adapted to the T2 Bio platform, called the T2Dx, and the firm will also market and distribute the test.

The T2Dx instrument also runs the firm's US Food and Drug Administration-cleared T2Bacteria and T2Candida panels that enable rapid identification of sepsis-causing bacterial and fungal pathogens, providing results directly from whole blood in three to five hours.

The CDI test has been in use under the US Food and Drug Administration's Emergency Use Authorization guidelines since March 12, and has allowed health professionals in HMH's New Jersey locations to quarantine and treat patients suspected of having COVID-19 more rapidly, as well as allocate critical resources more effectively and, in the case of a negative result, spare the patient unnecessary time in the hospital, according to a statement from HMH.

"The test, a highly sensitive and accurate novel assay, provides definitive results quickly," said David Perlin, CSO and senior vice president at CDI. "It combines in a new format the best elements found in the [US Centers for Disease Control and Prevention] and [The World Health Organization] diagnostics," Perlin also said.

Sperzel commented that with the newly licensed coronavirus test being adapted to the T2Dx instrument, T2 is "working to provide a comprehensive offering to enable the detection and early targeted treatment of COVID-19 patients and the related co-infections and secondary infections that cause sepsis.

"With our proprietary technology and its detection capability, we believe we are well positioned to address an urgent healthcare need for rapid diagnostic testing," he added.