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T2 Biosystems to Launch Lab-Developed Lyme Panel in Q3 Amid Ongoing Business Struggles


NEW YORK – T2 Biosystems announced Wednesday that it plans to launch its T2Lyme disease panel in the third quarter as a lab-developed test.

On a call with investors, the Lexington, Massachusetts, firm also said it is coordinating with an expert to help build customers for its T2Biothreat panel among US federal agencies and expects the recent publication of a T2Resistance panel clinical study to accelerate sales in Europe and to support premarket submission to the US Food and Drug Administration later this year.

The forward-looking news comes amid ongoing business struggles, as T2 recently obtained an extension from the Nasdaq for regaining listing compliance. Last month, T2 Bio reported a 69 percent decline in its preliminary Q4 revenues and roughly similar decline in full-year 2023 revenues. The company has not yet announced when it will report its final results, but it will likely happen in the next 10 days in order to meet the US Securities and Exchange Commission requirement to file within 90 days of fiscal year-end.

T2 first described the Lyme panel in 2016. Like other molecular tests for Lyme, it is able to detect pathogens transmitted by tick bites within the first 30 days after infection, whereas the current gold-standard two-tiered antibody test protocol is most useful between 30 and 60 days after infection. 

T2 President and CEO John Sperzel said Wednesday that rather than launch the T2Lyme panel on the firm's T2Dx instrument, it now plans to launch it as an LDT.

"In a LDT format, we can run the test without the T2Dx instrument, which can provide the potential to process hundreds of Lyme tests per day," Sperzel said. This is because the individual components of the firm's underlying technology can be leveraged to process a higher volume of samples, he added.

"Our objective is to provide early Lyme disease results to major US reference laboratories," Sperzel said, with samples collected by the partners' retail networks and sent to T2's to-be-determined LDT partner. Sperzel later noted that, by regulation, companies can only run an LDT in a single lab.

T2 continues to participate in the Lyme-X diagnostic funding competition, Sperzel said, adding that program is currently entering Phase III of funding, and T2 isn't ruling out submitting T2Lyme to the FDA for clearance as well as marketing it as an LDT.

When run in a lab, the panel will not require cartridges or the T2Dx instrument, Sperzel said, but can actually be run at higher throughputs using standard lab equipment. The T2 approach performs PCR on highly concentrated whole blood. The detection step obtains a pathogen's unique nuclear magnetic resonance signature with a detector that was once described by the firm's former CSO as approximately the size of a Rubik's Cube. These steps would be done manually in the LDT version, Sperzel said.

"We think we have an excellent, highly sensitive test, and there's strong potential for it in a partnership model rather than a go-it-alone expense model," he said.

The firm is also hoping to use last week's publication of a clinical study in the Journal of Clinical Microbiology to encourage uptake of its T2Resistance panel and support an FDA premarket submission in the third quarter of this year.

The panel detects 13 genes that can cause antibiotic resistance. The JCM study incorporated 59 patients at two clinical sites and showed the T2Resistane panel led 17 escalations and 32 changes or discontinuations of the wrong or unnecessary antibiotics. It also demonstrated an average turnaround time of 4.4 hours versus approximately 60 hours using blood culture-based methods, he said.

The T2Resistance panel previously received from the FDA breakthrough device designation, which is intended to accelerate its review process.

Sperzel also noted that the T2Biothreat panel was highlighted in the most recent budget proposal from the Office of the Assistant Secretary for Preparedness and Response.

And, T2 Bio has engaged Robin Robinson, the former founding head of the Biomedical Advanced Research and Development Authority (BARDA) and deputy assistant secretary at the Administration for Strategic Preparedness and Response (ASPR), to help facilitate uptake of the T2Biothreat panel among US federal agencies, including the US Centers for Disease Control and Prevention, ASPR, BARDA, the Department of Defense, and the National Institutes of Health.

Sales of T2Lyme, T2Resistance, and T2Biothreat were not incorporated into the firm's 2024 guidance for total sepsis and related product revenue of $10 million to $11 million compared to $6.7 million in 2023.

T2 Bio is also continuing its exploration of alternative business plans, Sperzel said, adding that the company is in "ongoing discussions with a number of firms regarding strategic and or commercial partnerships."

For now, T2 Bio will continue to prioritize maintaining compliance with Nasdaq listing requirements. The firm has negotiated a $15 million debt-to-equity deal with its lender CRG. The deal will be voted on at an upcoming shareholders meeting scheduled for April 11.

Sperzel also said that the final written compliance extension from Nasdaq stated the extension was granted based in part on the fact that T2 had described "a range of products that appear well poised to gain notable sales in the medical testing space."

Shares of T2 Bio finished Wednesday trading on the Nasdaq down 11 percent at $3.11.