T2 Biosystems (NASDAQ:TTOO) recently held an earnings call to discuss preliminary financial results for Q3 2023 and provide a business update. Despite a decline in revenue due to a sepsis test backorder, the company remains optimistic about a 60% increase in sepsis and related product revenue in Q4. CEO John Sperzel emphasized the company's focus on sepsis, bioterrorism, and Lyme disease, markets that collectively represent a multi-billion dollar opportunity.
Key takeaways from the call include:
- The company has made strides in reducing debt and implementing cost reductions to strengthen their balance sheet.
- T2 Biosystems' products, including the T2Dx Instrument and various test panels, have shown to detect sepsis-causing pathogens faster than blood culture-based products.
- The company has achieved important milestones such as FDA clearances and breakthrough device designation.
- The sepsis test backorder issue has largely been resolved, with expectations of zero backorder by the end of Q4.
- Progress has been made in commercializing the T2Biothreat Panel, with sales opportunities in the US and international markets.
- A reverse stock split at a 1 to 100 ratio was announced to maintain compliance with NASDAQ:TTOO listing requirements.
The company highlighted its efforts to implement sepsis programs and improve healthcare processes, with a focus on stakeholder involvement. T2 Biosystems is confident in the growing recognition of sepsis as a catalyst for positive change.
In terms of product development, the company is advancing their pipeline, including the T2Biothreat Panel, T2Resistance Panel, T2Lyme Panel, and Candida auris test. They have achieved FDA clearance for the T2Biothreat Panel and filed an FDA submission for adding Acinetobacter baumannii to the T2Bacteria Panel.
In financial terms, T2 Biosystems' cash position improved to $24.3 million at the end of Q3, up from $16.1 million in Q2. However, the company has not yet finalized their Q3 results and will report on gross margins in November.
The company is actively engaged in discussions with potential customers for the T2Biothreat Panel, targeting US lab response networks, state and public health labs, government agencies, and international governments. The company reiterated the unique features of their T2Biothreat Panel, the first and only FDA-cleared product to simultaneously detect six high-priority biothreat pathogens.
Finally, the company announced that the milestone-based product development contract with BARDA ended on September 15, 2023. While BARDA has decided not to fund additional product development under this contract, T2 Biosystems may apply for additional BARDA funding under new contract solicitations. The call concluded with the company expressing gratitude for participation and looking forward to providing updates in the future.
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