GlobeNewswire Inc | Nov 4, 2020 04:06PM EST

November 04, 2020

LEXINGTON, Mass., Nov. 04, 2020 (GLOBE NEWSWIRE) -- T2 Biosystems, Inc.(NASDAQ:TTOO), a leader in the rapid detection of sepsis-causing pathogens, today announced financial results for the third quarter ended September 30, 2020.

Recent Highlights

-- Achieved record quarterly revenue of $5.2 million, including product revenue of $3.8 million, representing growth of 213% and 219% respectively, compared to the prior year period -- Sold record 32 T2Dx Instruments in the third quarter, including 28 instruments in the U.S., an increase of 167% compared to the prior year period -- Increased T2Bacteria and T2Candida Panel revenue by 70% and 38% respectively, compared to the prior year, demonstrating significant growth in the sepsis portfolio -- Received Emergency Use Authorization (EUA) for the T2SARS-CoV-2 Panel molecular diagnostic test run on the FDA-cleared T2Dx Instrument to detect the virus responsible for COVID-19 -- Completed all milestones in the base phase of the product development contract awarded by BARDA, leading to the subsequent exercise of the first contract option valued at $10.5 million -- Received New Technology Add-on Payment (NTAP) extension for the T2Bacteria Panel from the U.S. Centers for Medicare & Medicaid Services (CMS) for fiscal year 2021

The third quarter was transformational for T2 Biosystems as we continue our growth as a commercially driven, customer-focused company. We achieved record sales during the quarter, grew our U.S. installed base of T2Dx Instruments by nearly 70 percent, saw strong demand at U.S. hospitals for our COVID-19 diagnostic test, and have commitments from new customers to adopt our products that have positioned us for long-term success, stated John Sperzel, President and CEO of T2 Biosystems. We remain committed to our three corporate priorities accelerating sales, improving operations, and advancing our pipeline and look to build on our momentum during the fourth quarter of 2020.

Third Quarter 2020 Financial Results Total revenue for the third quarter of 2020 was $5.2 million, an increase of 213% compared to the prior year period. Product revenue for the third quarter of 2020 was $3.8 million, an increase of 219% compared to the prior year period, driven by increased test panel and instrument sales. Research and contribution revenue for the third quarter of 2020 was $1.5 million, an increase of 198% compared to the prior year period, driven by increased activity under the BARDA contract.

Costs and operating expenses for the third quarter of 2020 were $15.9 million, an increase of $1.9 million compared to the prior year period, driven by increased cost of product revenue from increased sales and offset by lower research and development and selling, general and administrative expenses.

Net loss for the third quarter of 2020 was $11.3 million or a loss of $0.08 per share, compared to a net loss of $14.2 million or a loss of $0.31 per share in the prior year period.

Total cash, cash equivalents, current and long-term marketable securities, and restricted cash were $61.8 million as of September 30, 2020.

2020 Financial OutlookThe Company has increased its expectation of full year 2020 total revenue to be between $19.0 million to $20.0 million, including product revenue between $13.0 million to $14.0 million and research and contribution revenue of approximately $6.0 million. In the U.S., a minimum of 60 T2Dx Instrument are expected to be sold in the second half of 2020.

Fourth Quarter 2020 Financial OutlookThe Company expects fourth quarter 2020 total revenue to be between $8.7 million to $9.7 million, including product revenue between $7.2 million to $8.2 million and research and contribution revenue of approximately $1.5 million. In the U.S., a minimum 32 T2Dx Instruments are expected to be sold in the fourth quarter of 2020.

Webcast and Conference Call InformationT2s management team will host a conference call today, November 4, 2020, beginning at 4:30pm ET. Investors interested in listening to the call may do so by dialing 877-407-9208 for domestic callers or 1-201-493-6784 for International callers. A live and recorded webcast of the call will be available on the Investors section of the Companys website at www.t2biosystems.com.

AboutT2 BiosystemsT2 Biosystems, a leader in the rapid detection of sepsis-causing pathogens, is dedicated to improving patient care and reducing the cost of care by helping clinicians effectively treat patients faster than ever before. T2 Biosystems products include the T2Dx Instrument, T2Candida Panel, the T2Bacteria Panel, the T2Resistance Panel, and the T2SARS-CoV-2 Panel and are powered by the proprietary T2 Magnetic Resonance (T2MR) technology. T2 Biosystems has an active pipeline of future products, including the T2Cauris Panel, and T2Lyme Panel, as well as additional products for the detection of bacterial and fungal pathogens and associated antimicrobial resistance markers, and biothreat pathogens.

Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our revenue results and cash balance, financial outlook, anticipated strategic priorities, product demand, commitments or opportunities, and growth expectations or targets, , as well as statements that include the words expect, intend, plan, believe, project, forecast, estimate, may, should, anticipate, and similar statements of a future or forward looking nature. Furthermore, statements contained in this document relating to the recent global outbreak of the novel coronavirus disease(COVID-19),the impact of which remains inherently uncertain on our financial results, are forward-looking statements. These forward-looking statements are based on managements current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, (i)any inability to (a)realize anticipated benefits from commitments, contracts or products; (b)successfully execute strategic priorities; (c)bring products to market; (d)expand product usage or adoption; (e)obtain customer testimonials; (f)accurately predict growth assumptions; (g) realize anticipated revenues; (h)incur expected levels of operating expenses; or (i)increase the number of high-risk patients at customer facilities; (ii)failure of early data to predict eventual outcomes; (iii)failure to make or obtain anticipated FDA filings or clearances within expected time frames or at all; or (iv)the factors discussed under Item 1A. Risk Factors in the companys Annual Report on Form10-Kfor the year ended December31, 2019, filed with the U.S. Securities and Exchange Commission, or SEC, on March16, 2020, and other filings the company makes with the SEC from time to time. These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent managements estimates as of the date of this press release. While the company may elect to update such forward-looking statements at some point in the future, unless required by law, it disclaims any obligation to do so, even if subsequent events cause its views to change. Thus, no one should assume that the Companys silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. These forward-looking statements should not be relied upon as representing the companys views as of any date subsequent to the date of this press release.

Media Contact:Gina Kent,Vault Communicationsgkent@vaultcommunications.com 610-455-2763

Investor Contact:Philip Trip Taylor, Gilmartin Groupphilip@gilmartinIR.com415-937-5406



CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except share and per share data)(Unaudited)

September30, December31, 2020 2019Assets Current assets: Cash and cash equivalents $ 19,059 $ 11,033 Marketable securities 21,990 ? Accounts receivable 3,860 2,825 Inventories 3,569 3,599 Prepaid expenses and other current assets 2,969 1,438 Total current assets 51,447 18,895 Property and equipment, net 3,585 5,845 Operating lease right-of-use assets 1,729 3,360 Restricted cash 551 180 Marketable securities 20,186 ? Other assets 133 206 Total assets $ 77,631 $ 28,486 Liabilities and stockholders? equity (deficit)Current liabilities: Notes payable $ ? $ 42,902 Accounts payable 2,407 3,753 Accrued expenses and other current 7,654 11,207 liabilitiesDerivative liability ? 2,425 Deferred revenue 290 285 Total current liabilities 10,351 60,572 Notes payable, net of current portion 44,612 ? Operating lease liabilities, net of current 479 1,873 portionDeferred revenue, net of current portion 300 46 Derivative liability 1,235 ? Other liabilities 3,080 ? Commitments and contingencies Stockholders? equity (deficit): Preferred stock, $0.001 par value; 10,000,000shares authorized; noshares issued and outstanding at ? ? September30, 2020 and December31,2019Common stock, $0.001 par value; 200,000,000shares authorized;147,954,385 and 50,651,535 shares issued and 147 51 outstanding atSeptember30, 2020 and December31, 2019,respectivelyAdditional paid-in capital 430,529 342,121 Accumulated other comprehensive loss (36 ) ? Accumulated deficit (413,066 ) (376,177 )Total stockholders? equity (deficit) 17,574 (34,005 )Total liabilities and stockholders? equity $ 77,631 $ 28,486 (deficit)

T2 BIOSYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(In thousands, except share and per share data)(Unaudited)

Three Months Ended Nine Months Ended September30, September30, 2020 2019 2020 2019 Revenue: Product revenue $ 3,757 $ 1,177 $ 5,843 $ 3,765 Research revenue ? 56 11 269 Contribution 1,488 444 4,488 1,232 revenueTotal revenue 5,245 1,677 10,342 5,266 Costs and expenses:Cost of product 6,833 3,944 13,804 13,153 revenueResearch and 3,965 4,098 12,883 12,047 developmentSelling, generaland 5,083 5,981 16,691 19,756 administrativeTotal costs and 15,881 14,023 43,378 44,956 expensesLoss from (10,636 ) (12,346 ) (33,036 ) (39,690 )operationsInterest (646 ) (1,876 ) (3,906 ) (5,658 )expense, netOther income, 27 51 53 383 netNet loss $ (11,255 ) $ (14,171 ) $ (36,889 ) $ (44,965 )Net loss pershare ? basic $ (0.08 ) $ (0.31 ) $ (0.33 ) $ (1.01 )and dilutedWeighted-averagenumber of common shares used incomputingnet loss pershare ? basic 147,793,891 45,413,215 112,371,006 44,711,463 and diluted Othercomprehensive loss:Net loss $ (11,255 ) $ (14,171 ) $ (36,889 ) $ (44,965 )Net unrealizedgain (loss) on (36 ) ? (36 ) ? marketablesecuritiesComprehensive $ (11,291 ) $ (14,171 ) $ (36,925 ) $ (44,965 )loss