NEW YORK –T2 Biosystems reported after the market closed on Tuesday that its first quarter revenues jumped 43 percent year over year.
For the three months ended March 31, the company posted revenues of $2.5 million compared to $1.8 million in the prior-year period, but below the analysts' average estimate of $2.6 million.
The firm issued a preliminary earnings report in March in which it said that it anticipated 22 percent to 44 percent growth in Q1 revenues compared to the comparable quarter in 2019.
John Sperzel, who became CEO of T2 in January, said in a call to discuss the earnings that the firm has been executing on its strategies of increasing test sales, reducing costs, and advancing the test pipeline for the T2Dx instrument.
"While the COVID-19 pandemic has created challenges around the world, diagnostic testing is center stage and its value has never been more apparent," Sperzel said.
He noted that T2 is seeing increased utilization of its sepsis tests in areas hard hit by the outbreak, like New York City, Italy, Spain, and Greece, in part because secondary infections that can cause sepsis are potential sequelae of SARS-CoV-2 infection.
The pandemic is also providing headwinds, Sperzel said. "As hospitals have undergone extreme changes to focus their resources on the identification, treatment, and management of patients with COVID-19, they currently have limited bandwidth to advance evaluations of new technologies," he said, adding that many hospitals have also restricted access for non-essential personnel.
That said, "Most of our customers are continuing to place orders, and in some cases larger or more frequent orders, given the patient population in their intensive care units," Sperzel commented.
Lexington, Massachusetts-based T2 Bio's product revenue fell to $1.0 million, down 20 percent from $1.3 million in Q1 2019. Research revenue increased 218 percent to $1.5 million.
In the quarter, T2 Bio executed a worldwide licensing agreement for COVID-19 assay design to accelerate the development of the T2SARS-CoV-2 Panel for the T2Dx instrument. It also received a multiyear Innovative Technology contract from Vizient, the largest healthcare group purchasing organization in the US, providing access and contracted pricing for the T2Dx Instrument, T2Candida Panel, and T2Bacteria Panel.
During the call, Sperzel noted that the T2 expects to file for Emergency Use Authorization with the US Food and Drug Administration for its SARS-CoV-2 panel test for respiratory samples as soon as the end of this quarter.
The firm reported a net loss of $14.9 million, or $.22 per share, for the recently completed quarter compared to a net loss of $15.1 million, or $.34 per share, for Q1 2019, and beat the consensus Wall Street estimate for a loss of $.23 per share.
T2 Bio's R&D costs in Q1 2019 increased 26 percent to $4.9 million from $3.9 million, while its SG&A costs decreased 8 percent to $6.5 million from $7.1 million.
Consistent with cost-saving strategies announced by the firm's new CEO last quarter, the firm reported it had reduced cost structure in the quarter as well as a 22 percent headcount reduction. It also plans to consolidate its facilities, Sperzel said, and expects to see further impacts in the second quarter. It is also implementing initiatives to reduce its cost of goods.
T2 Bio finished the quarter with $36.3 million in cash and cash equivalents. It has suspended its guidance for 2020, as previously reported.
The firm has also received a warning in April from Nasdaq that its stock price has been below $1 for at least 30 consecutive business days. It has until Oct. 5 to avoid possibly being delisted.
In Wednesday morning trading on the Nasdaq T2 Biosystems' stock was down 9 percent, to $.54.