NEW YORK – Molecular diagnostic system and assay maker T2 Biosystems said on Wednesday that its third quarter revenues increased 213 percent year over year, driven by record product sales.
For the three months ended Sept. 30, the company reported revenues of $5.2 million compared to $1.7 million in the prior-year period, beating analysts' consensus estimate of $5.1 million.
"The third quarter was transformational for T2 Biosystems as we continue our growth as a commercially driven, customer-focused company," T2 Biosystems President and CEO John Sperzel said in a statement. "We achieved record sales during the quarter, grew our US installed base of T2Dx Instruments by nearly 70 percent, saw strong demand at US hospitals for our COVID-19 diagnostic test, and have commitments from new customers to adopt our products that have positioned us for long-term success."
T2's Q3 product revenues more than tripled year over year to $3.8 million from $1.2 million.
The firm's contribution revenue for the quarter was $1.5 million, more than triple that of the prior-year period, driven increased activity under its US Department of Health and Human Services Biomedical Advanced Research and Development Authority (BARDA) contract. The firm reported no research revenue in the quarter compared to $56,000 in Q3 2019.
The firm said that in Q3 it sold record 32 T2Dx Instruments, including 28 instruments in the US, an increase of 167 percent compared to the prior-year period.
On a call with investors, Sperzel said that US installed base is now 69 T2Dx instruments. "We achieved an astounding 383 percent increase in US product sales revenue during the third quarter compared to the prior year period," Sperzel also said. The new SARS-CoV-2 test is "providing a catalyst for increased sales of T2Dx instruments" in the US, he added, noting that the instruments are being positioned in hospital settings for the potential future adoption of the firm's sepsis products.
The firm has also transitioned from a reagent rental placement model to an instrument purchase model for T2Dx that also includes "large, upfront purchase orders with contracted minimum volume commitments and standing orders for T2 SARS-CoV-2 panels," Sperzel said. Each of the 28 US instrument in the quarter was a capital sale, he noted.
T2 also increased revenue for its T2Bacteria and T2Candida panels by 70 percent and 38 percent respectively compared to the prior year, which it said demonstrated significant growth in its sepsis portfolio.
In the quarter, T2 received Emergency Use Authorization for the T2SARS-CoV-2 Panel molecular diagnostic test run on the T2Dx Instrument, and completed all milestones in the base phase of a product development contract awarded by BARDA leading to the subsequent exercise of the first contract option valued at $10.5 million. In addition, in the quarter T2 received a New Technology Add-on Payment (NTAP) extension for the T2Bacteria Panel from the US Centers for Medicare & Medicaid Services (CMS) for fiscal year 2021.
On the call, Sperzel said the firm manufactured approximately 70,000 tests in Q3 and plans to further increase its test manufacturing capacity to 300,000 tests per quarter by early 2021.
The firm reported research and development expenses of $4.1, down 3 percent from $4.0 million in Q3 2019. Its sales and general administrative expenses were $5.1 million, a 15 percent decrease from $6.0 million in the prior year quarter.
Net loss for the third quarter of 2020 was $11.3 million, or $0.08 per share, compared to a net loss of $14.2 million or $0.31 per share in the prior year period. Loss per share was in line with analysts' consensus estimate.
The firm ended Q3 with cash and cash equivalents of $19.1 million and current marketable securities of $22.0 million.
T2 Biosystems said it expects fourth quarter revenues of $8.7 million to $9.7 million, including product revenue of $7.2 million to $8.2 million and combined research and contribution revenue of approximately $1.5 million. In the US, the company expects to sell a minimum 32 T2Dx Instruments in Q4.
T2 increased the low end of its full-year 2020 revenue guidance. It expects total revenues of $19.0 million to $20.0 million compared to a previous range of between $18.0 million to $20.0 million. The company said it expects product revenue of $13.0 million to $14.0 million and research and contribution revenue of approximately $6.0 million. In the US, the company expects to sell a minimum of 60 T2Dx instruments in the second half of 2020.
In Thursday morning trade on the Nasdaq, shares of T2 Biosystems were down 14 percent at $1.30.