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T2 Biosystems Preliminary Q4 Revenues Grow 155 Percent, Miss Estimates

NEW YORK – T2 Biosystems on Tuesday announced preliminary fourth quarter revenues of $7.8 million late Tuesday, representing growth of 155 percent over $3.1 million in the year-ago quarter but below the consensus Wall Street estimate of $8.7 million. 

The firm also announced that it has amended the terms of a loan agreement with CRG, a global healthcare investor.

Product revenues for T2 in the fourth quarter were up 274 percent to $5.8 million, the Lexington, Massachusetts-based firm said.

Mark Massaro of BTIG commented in a note to investors that the Q4 revenue miss was "disappointing," but due in part to the fact that the firm is expecting to increase the size of its sales force. Massaro and his team raised its price target to $3.50 and rated the stock Buy.

Likewise, at Cannacord Genuity, Max Massuci told investors in a note that his team was "encouraged by the direction T2 is heading in 2021," and did not change its rating of Buy with a price target of $3.50.

In the quarter, T2 sold 21 of its T2Dx instruments, including 19 in the US. The firm said it also grew its sepsis testing business to an annual run rate of $86,000 per legacy instrument. Its SARS-CoV-2 test utilization grew to an annual run rate of approximately $265,000 per instrument sold in 2020.

For the full year, T2 announced preliminary total revenues of $18.1 million and product revenue of $11.7 million, representing growth of 118 percent and 119 percent compared to total revenues of $8.3 million and product revenues of $5.3 million in 2019. On average, analysts estimate full year 2020 revenues of $19.0 million.

"Amid the global health emergency, we took rapid action to meet the COVID-19 testing needs of US hospitals by developing and commercializing the T2SARS-CoV-2 Panel," said John Sperzel, T2's president and CEO. "This has accelerated our business case and our business profile by allowing us to significantly increase our installed base of T2Dx Instruments in US hospitals.

"While the COVID testing needs of our customers will continue to fluctuate as we experienced in the fourth quarter, we are confident that we are entering 2021 in a stronger position, and are excited to drive continued adoption of our products and sustained growth through increased utilization of our highly differentiated sepsis products," Sperzel added.

In 2020 the firm sold 53 T2Dx Instruments, including 47 in the US, which more than doubled its US installed base.

The firm said its unaudited cash, cash equivalents, current and long-term marketable securities, and restricted cash totaled $52.7 million as of Dec. 31, 2020.

Complete fourth quarter and full-year 2020 financial results are scheduled to be released in early March.

T2 also announced that in January it amended its term loan agreement with CRG to extend the interest-only and principal payment periods to Dec. 31, 2022, and to reduce the minimum product revenue target for the 24-month period beginning on January 1, 2020.

In early morning trading on the Nasdaq, T2's stock was down 23 percent to $2.15. 

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