NEW YORK (GenomeWeb) – T2 Biosystems reported after the close of the market yesterday a rise in its net loss for the third quarter as costs increased amid the ongoing rollout of its Candida test.
For the three-month period ended Sept. 30, the company posted revenues in the quarter of roughly $1 million, $245,000 from product sales and $804,000 in research revenues, compared with no revenues in the third quarter of 2014. Wall Street analysts, on average, had anticipated revenues of around $700,000.
Quarterly revenues were driven by continued adoption of T2 Candida by hospitals, T2 President and CEO John McDonough said during a conference call.
"As of the close of the third quarter … we have signed contracts for T2Candida implementation and T2Dx instrument placement with 19 customers, including 18 hospitals in the United States and one lab in Europe," he said, adding that the company anticipates having 30 signed contracts by the end of the year.
"As we move from early adopters toward the mainstream market, hearing from customers will make it easier for others to adopt," McDonough said. "Patient stories are beginning to come in and physicians are beginning to share anecdotally at conferences and on panels the value they are seeing from our products."
He also said that T2 is aiming to expand its presence in Europe next year and anticipates signing on a number of distribution partners in key markets in the first half of 2016.
T2 CFO Moe Castonguay noted during the call that product revenues are expected to increase in the fourth quarter, but cautioned that gross margins will not be impactful.
"We are in the early stages of ramping up manufacturing operations and have not yet attained economies of scale," he said. "As a result, our product margins are not meaningful and are not reflective of what are margins will be when we reach meaningful commercial scale."
T2's net loss in the quarter increased to $11.6 million, or $.57 per share, from a year-ago Q3 loss of $8.1 million, or $.71 a share, beating analysts' average expected loss per share of $.59.
Research and development costs in the quarter rose to $6.2 million from $4.8 million as the company continued work on a number of pipeline candidates including a test for Lyme disease detection, under development with Canon US Life Sciences, and a test for bacterial sepsis called T2Bacteria.
McDonough said during the call that the firm remains on track to begin clinical testing of T2Bacteria before the end of this year, with data ready for submission to the US Food and Drug Administration in the third quarter of 2016.
Its third quarter SG&A expenses jumped to $5.2 million from $3 million as T2 expanded its sales team and marketing programs around the T2 Candida test.
At the end of the third quarter, T2 had cash and cash equivalents totaling $40.1 million.
In early Tuesday morning trading on the Nasdaq, shares of T2 were up $.06 at $11.54.