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T2 Biosystems Q1 Revenues Nearly Triple

NEW YORK –T2 Biosystems reported after the market closed on Thursday that its first quarter revenues nearly tripled year over year.

For the three months ended March 31, the company posted revenues of $7.0 million compared to $2.5 million in the prior-year period, and above Wall Street analysts' average estimate of $6.4 million.

Lexington, Massachusetts-based T2 Bio's product revenues rose to $4.7 million, up 345 percent from $1.0 million in Q1 2020. Research and contribution revenues increased 54 percent to $2.3 million from $1.5 million, driven by increased contract activity from the US Department of Health and Human Services' Biomedical Advanced Research and Development Authority, the firm said. 

Compared to the year-ago quarter, the firm increased US sepsis test utilization by 85 percent, resulting in an annualized run rate of about $111,000 per legacy sepsis instrument. The company is targeting an annualized run rate of $200,000 per instrument per year, CEO John Sperzel said on a conference call to discuss the firm's financial results. T2 Bio also sold four T2Dx instruments during the first quarter, one in the US and three internationally.

The COVID-19 annualized test utilization run rate in the US was $214,000 per instrument, said Sperzel, who noted that the T2SARS-CoV-2 panel is capable of detecting the B.1.617 SARS-CoV-2 variant in India. The test received Emergency Use Authorization from the US Food and Drug Administration in August.

Despite contributions from the COVID-19 panel, Sperzel reiterated that sepsis is the company's primary focus. The firm's goals for 2021 are to transition its T2Dx instruments sold in the US from COVID-19 testing to sepsis testing, increase sepsis test utilization in its legacy installed base, and increase the overall installed base of the T2Dx instrument, he said.

As COVID-19 rates continue to decline and access to hospitals increases, Sperzel said there would be a greater opportunity to sell new instruments and test panels to customers who are currently only using the COVID-19 panel. He added he expects 70 percent of T2Dx instrument sales to occur in the second half of 2021. T2 Bio is targeting a mix of integrated hospital systems and standalone hospitals for its instruments, Sperzel said.

The firm reported a net loss of $10.7 million, or $.07 per share, for the recently completed quarter compared to a net loss of $14.9 million, or $.22 per share, for Q1 2020. It equaled the consensus Wall Street estimate for a loss of $.07 per share.

T2 Bio's R&D costs in Q1 2021 decreased 2 percent to $4.7 million from $4.8 million, while its SG&A costs decreased 7 percent to $6.2 million from $6.7 million.

T2 Bio finished the quarter with $43.9 million in cash, cash equivalents, marketable securities, and restricted cash.

The company expects revenues for the full year 2021 to be between $24.0 million and $26.0 million, including product revenues to be between $16.0 million and $18.0 million and research and contribution revenues of $8.0 million. It also expects to close at least 30 T2Dx instrument contracts in 2021.

T2 Bio said it has modified the terms of its existing $69 million contract with BARDA to accelerate product development. T2 Bio is modifying the contract to advance future deliverables into the currently funded Option 1 of the contract for its T2Biothreat blood panel to detect biothreat pathogens; T2Resistance panel to detect antibiotic resistance genes associated with sepsis-causing pathogens; comprehensive sepsis panel; and next-generation instrument to process panels with broader pathogen detection and resistant genes.

Sperzel said on the call that the new product development programs are "running ahead of schedule and under budget."

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