NEW YORK (GenomeWeb) – T2 Biosystems reported after the close of the market Tuesday that its fourth quarter and full-year 2014 loss increased as it ramped up R&D and invested in clinical trials for its T2Candida Panel and T2Dx instrument.
The Lexington, Mass.-based molecular diagnostics firm reported research and grant revenues for the quarter of $119,000, up from $55,000 in the fourth quarter of 2013. It didn't report any commercial revenues in the quarter or full year.
T2 posted a Q4 net loss of $9.1 million, or $.45 per share, compared to a Q4 2013 loss of $8.3 million, or $5.89 per share. The firm was privately held throughout the precious fiscal year and went public in August 2014. For Q4 2014, it reported its loss per share using around 20 million shares, while its Q4 2013 loss per share was based on around 1.4 million shares.
The increased loss was due to greater R&D and SG&A spending. Its R&D costs were $5.2 million for the quarter, up 21 percent from $4.3 million in the comparable period in 2013. Its SG&A expenses jumped to $3.7 million from $1.4 million year over year.
The firm said in a statement that the increased costs were primarily due to "the direcT2 pivotal clinical trial and other regulatory support and activity, research and development activities for additional applications of T2MR, expansion of marketing programs, build-out of the US commercial infrastructure, and increases in share-based compensation charges and incremental expenses related to being a public company."
T2 gained US Food and Drug Administration clearance of its T2Candida panel and the T2Dx Instrument in September, and the firm began commercialization efforts shortly thereafter. The products are based on the T2MR technology platform, which uses superparamagnetic nanoparticles to measure the reaction of water molecules in the presence of magnetic fields.
At the JP Morgan Healthcare Conference held last month in San Francisco, T2 Biosystems CEO John McDonough noted that the firm had expanded from three to seven sales representatives in 2014 as it began targeting the top hospitals in the US for treating sepsis patients. He said on a conference call following the release of the firm's financial results that T2 is targeting a total of around 15 sales reps by the end of this year.
The firm's T2Candida test detects Candida albicans, Candida tropicalis, Candida parapsilosis, Candida glabrata, and Candida krusei. In clinical studies it has shown that it can provide results in less than five hours while detecting pathogens in 91.1 percent of cases, with overall specificity of 99.4 percent. As a result, the test could enable proper treatment in under 12 hours, dramatically reducing mortality rates and cutting costs to the hospital and patient.
However, McDonough noted on the call that the sales cycle for the test and platform is expected to take six to 12 months initially. The firm's sales staff is targeting the "top 450 hospitals in the United States in terms of volume of high-risk patients," said McDonough. He estimated that these hospitals represent one-third of the estimated $1.3 billion T2Candida market opportunity in the US.
He added that the firm is "engaged" with around 25 percent of these hospitals currently, and "we've been encouraged with the response and progress coming from those initial interactions." The firm's goal is to make roughly 30 placements in these high-volume hospitals by the end of 2015.
T2 also recently announced an alliance with Canon US Life Sciences to jointly develop a diagnostic test panel for rapid detection of Lyme disease on the T2MR platform.
For full-year 2014, T2 reported research and grant revenues of $$119,000, down from $266,000 in FY 2013.
Its net loss for the year was $36 million, or $4.15 per share, compared to a net loss of $27.5 million, or $19.72 per share, for FY 2013.
T2's R&D expenses jumped to $19.8 million from $14.9 million, and its SG&A spending more than doubled to $11 million from $5 million.
The firm finished the year with $73.8 million in cash and cash equivalents.
In Wednesday morning trade on the Nasdaq, shares of T2 were down nearly 1 percent at $19.88.