T2 Biosystems (TTOO) Reports Q4 Revenues Below Estimates; Provides Q1 & FY19 Revenue Outlook

T2 Biosystems (NASDAQ: TTOO) reported Q4 EPS of $. Revenue for the quarter came in at $1.8 million versus the consensus estimate of $2.67 million.

• Reported fourth quarter total revenue of $1.8 million, up 6% year-over-year.
• Reported fourth quarter product revenue of $1.3 million reflecting increased testing volume and stable capital sales as more new customers selected the reagent rental model.
• Secured a record 14 new contracts of T2Dx® Instruments in the fourth quarter, which was at the high end of 2H18 guidance.
• Increased targeted high-risk patients at newly contracted hospitals by over 80,000.
• In February, ranked in top ten of Fast Company’s 2019 Most Innovative Companies, Biotech Sector.

“2018 was a year of major achievements for the Company highlighted by the FDA clearance of the T2Bacteria Panel, which has driven record levels of new interest from hospitals and allowed us to accelerate the growth of our installed base,” said John McDonough, president and chief executive officer. “In the fourth quarter we secured a record 14 new system contracts, contributing to 25 secured in the second half of the year, which came in at the top of our expectations. The earliest of these new T2Bacteria Panel customers have now completed the installation, validation and training processes and are beginning to test patients. Concurrently, we anticipate the body of clinical evidence supporting T2Bacteria Panel will grow this year, along with the sharing of best practices and experience between hospitals. We expect this steady increase of T2Bacteria Panel activity to drive greater recurring revenue through 2019, and along with growing system contracts, will contribute to achieving our revenue growth guidance for 2019 and a doubling of revenue again in 2020.”

Mr. McDonough added, “In 2019 we expect to further expand our market opportunity with the T2Resistance Panel, which we expect to launch as a research-use only product in the U.S. and anticipate receiving a CE mark for commercial launch in Europe by the end of 2019. On the development front, we plan to collect data for our pivotal study for the T2Lyme Panel and are encouraged by pre-clinical data that shows the potential to improve patient outcomes.”

GUIDANCE:

T2 Biosystems sees Q1 2019 revenue of $1.3-1.5 million, versus the consensus of $4.05 million.

T2 Biosystems sees FY2019 revenue of $21 million, versus the consensus of $21.77 million.

The company is providing the following full year 2019 financial guidance:

• Total revenue is expected to double in 2019 compared to $10.5 million in 2018. First quarter 2019 revenue is expected to be in the range of $1.3 million to $1.5 million, reflecting continuing adoption of T2Bacteria and T2Candida Panel test sales and expanding T2Dx® Instruments reagent rentals and sales in the U.S. and internationally.
• The company expects to secure contracts of 70 to 80 T2Dx® Instruments in 2019, including 8 to 10 contracts in the first quarter 2019, which follows the historical seasonal pattern of contracts in the fourth quarter being greater than the first quarter.
• Operating expenses, excluding cost of product revenue, are expected to be $10.5 million to $11.5 million in the first quarter 2019. Total costs and expenses will include non-cash depreciation and stock based compensation expenses from stock options and RSUs of approximately $3.0 million.

For earnings history and earnings-related data on T2 Biosystems (TTOO) click here.

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