T2 Biosystems (TTOO) 10-Q 4 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 03, 2015
Document and Entity Information
Entity Registrant Name	T2 Biosystems, Inc.
Entity Central Index Key	1,492,674
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		20,384,532
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 40,117	$ 73,849
Accounts receivable	378	201
Prepaid expenses and other current assets	1,104	1,076
Inventories	1,057	115
Restricted cash		80
Total current assets	42,656	75,321
Property and equipment, net	9,448	2,760
Restricted cash, net of current portion	260	260
Deferred tax assets	313	313
Other assets	447	480
Total assets	53,124	79,134
Current liabilities:
Accounts payable	993	735
Accrued expenses and other current liabilities	4,291	3,662
Notes payable	1,417	295
Deferred revenue	1,199	80
Deferred tax liabilities	313	313
Lease incentives	241	87
Total current liabilities	8,454	5,172
Notes payable, net of current portion	19,344	20,660
Lease incentives, net of current portion	1,136	106
Other liabilities	$ 380	$ 195
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued
Common stock, $0.001 par value; 200,000,000 shares authorized; 20,339,261 and 20,041,645 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively	$ 20	$ 20
Additional paid-in capital	160,643	156,576
Accumulated deficit	(136,853)	(103,595)
Total stockholders' equity	23,810	53,001
Total liabilities and stockholders' equity	$ 53,124	$ 79,134

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheet (Parentheticals) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Condensed Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	20,339,261	20,041,645
Common stock, shares outstanding	20,339,261	20,041,645

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue
Product revenue	$ 245		$ 255
Research revenue	804		1,547
Total revenue	1,049		1,802
Costs and expenses:
Cost of product revenue	829		832
Research and development	6,204	$ 4,803	18,724	$ 14,572
Selling, general and administrative	5,181	2,984	14,086	7,271
Total costs and expenses	12,214	7,787	33,642	21,843
Loss from operations	(11,165)	(7,787)	(31,840)	(21,843)
Interest expense, net	(501)	(304)	(1,455)	(471)
Other income (expense), net	22		37	(1)
Net loss	(11,644)	(8,091)	(33,258)	(22,315)
Comprehensive loss	(11,644)	(8,091)	(33,258)	(22,315)
Reconciliation of net loss to net loss applicable to common stockholders:
Net loss	(11,644)	(8,091)	(33,258)	(22,315)
Accretion of redeemable convertible preferred stock to redemption value		(758)		(4,570)
Net loss applicable to common stockholders	$ (11,644)	$ (8,849)	$ (33,258)	$ (26,885)
Net loss per share applicable to common stockholders - basic and diluted	$ (0.57)	$ (0.71)	$ (1.64)	$ (5.25)
Weighted-average number of common shares used in computing net loss per share applicable to common stockholders - basic and diluted	20,331,274	12,379,337	20,225,056	5,120,977

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating activities
Net loss	$ (33,258)	$ (22,315)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	979	459
Stock-based compensation expense	2,899	1,057
Noncash interest expense	288	102
Change in fair value of warrants		1
Deferred rent	(86)	15
Changes in operating assets and liabilities:
Accounts receivable	(177)
Prepaid expenses and other current assets	(28)	(901)
Inventories	(942)
Accounts payable	258	(227)
Accrued expenses and other liabilities	303	2,110
Deferred revenue	1,119
Net cash used in operating activities	(28,645)	(19,699)
Investing activities
Purchases of property and equipment	(6,100)	(1,039)
Decrease in restricted cash	80
Net cash used in investing activities	(6,020)	(1,039)
Financing activities
Proceeds from issuance of common stock in initial public offering, net of offering costs		60,145
Proceeds from issuance of common stock and stock option exercises	1,168	150
Proceeds from notes payable, net of issuance costs		9,800
Repayment of notes payable	(235)	(3,966)
Net cash provided by financing activities	933	66,129
Net (decrease) increase in cash and cash equivalents	(33,732)	45,391
Cash and cash equivalents at beginning of period	73,849	30,198
Cash and cash equivalents at end of period	40,117	75,589
Supplemental disclosures of cash flow information
Cash paid for interest	1,110	294
Supplemental disclosures of noncash activities
Accrued cost of property and equipment	$ 1,567
Accretion of Series A-1, A-2, B, C, D and E redeemable convertible preferred stock to redemption value		4,570
Issuance costs incurred but unpaid at period end		80
Initial public offering costs incurred but unpaid at period end		2,104
Conversion of redeemable convertible preferred stock to common stock		117,383
Conversion of preferred stock warrants to common stock		$ 1,226

Nature of Business

Nature of Business	9 Months Ended
	Sep. 30, 2015
Nature of Business
Nature of Business	1. Nature of Business T2 Biosystems, Inc. (the “Company”) was incorporated on April 27, 2006 as a Delaware corporation with operations based in Lexington, Massachusetts. The Company is an in vitro diagnostic company that has developed an innovative and proprietary platform that enables rapid, sensitive and simple direct detection of pathogens, biomarkers and other abnormalities across a variety of unpurified patient sample types. The Company is using its T2 Magnetic Resonance platform (“T2MR”) to develop a broad set of applications aimed at reducing mortality rates, improving patient outcomes and reducing the cost of healthcare by helping medical professionals make targeted treatment decisions earlier. The Company’s initial development efforts target sepsis, hemostasis and Lyme disease, areas of significant unmet medical need in which existing therapies could be more effective with improved diagnostics. On September 22, 2014, the Company received market authorization from the U.S. Food and Drug Administration (“FDA”) for its first two products, the T2Dx Instrument (“T2Dx”) and T2Candida Panel (“T2Candida”). The Company has devoted substantially all of its efforts to research and development, business planning, recruiting management and technical staff, acquiring operating assets, raising capital, and, most recently, the commercialization of its products. Liquidity At September 30, 2015 the Company has cash and cash equivalents of $40.1 million and an accumulated deficit of $136.9 million. The future success of the Company is dependent on its ability to successfully commercialize its FDA approved products, obtain regulatory clearance for and successfully launch its future product candidates and ultimately attain profitable operations, and obtain additional capital. Historically, the Company has funded its operations primarily through its August 2014 initial public offering, private placements of redeemable convertible preferred stock and through debt financing arrangements. Management believes that its existing cash resources at September 30, 2015 together with the additional remaining liquidity of up to $10.0 million of available borrowings from existing debt facilities (Note 5) and $10.0 million available under an Equipment Lease Facility (the “Facility”) entered into in October 2015 (Note 8) to help the Company meet its capital equipment needs, will be sufficient to allow the Company to fund its current operating plan through at least the next 12 months. The Company is subject to a number of risks similar to other newly commercial life science companies, including, but not limited to commercially launching the Company’s products, development and market acceptance of the Company’s product candidates, development by its competitors of new technological innovations, protection of proprietary technology, and raising additional capital.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The Company’s financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States GAAP as defined in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The Company’s condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, T2 Biosystems Securities Corporation. All intercompany balances and transactions have been eliminated. Unaudited Interim Financial Information Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying interim condensed consolidated balance sheet as of September 30, 2015, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2015 and 2014, the condensed consolidated statements of cash flows for the nine months ended September 30, 2015 and 2014 and the related financial data and other information disclosed in these notes are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2015, and the results of its operations and its cash flows for the three and nine months ended September 30, 2015 and 2014. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015, any other interim periods, or any future year or period. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company views its operations and manages its business in one operating segment, which is the business of developing and launching commercially its diagnostic products aimed at reducing mortality rates, improving patient outcomes and reducing the cost of healthcare by helping medical professionals make targeted treatment decisions earlier. Net Loss Per Share Basic net loss per share is calculated by dividing net loss applicable to common stockholders, which is net loss plus accretion of redeemable convertible preferred stock to redemption value in the period, by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method for outstanding stock options and warrants. For purposes of the diluted net loss per share calculation, redeemable convertible preferred stock and warrants to purchase redeemable convertible preferred stock outstanding prior to the August 2014 initial public offering and stock options are considered to be common stock equivalents, but have been excluded from the calculation of diluted net loss per share, as their effect, including the related impact to the numerator of the fair value adjustment of the warrant and the impact to the denominator of the warrant shares, would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share applicable to common stockholders was the same for all periods presented. Guarantees From time to time, the Company enters into indemnification agreements in the ordinary course of business, including, but not limited to, indemnification agreements with directors and officers, within its lease agreements for office, laboratory and manufacturing space, and with certain suppliers and business partners. As of September 30, 2015 and December 31, 2014, the Company had not experienced any material losses related to these indemnification obligations, and no material claims with respect thereto were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established. Revenue Recognition The Company generates revenue from product sales, which includes the sale of T2Dx, consumable diagnostic tests and related services, and research and development agreements with third parties. The Company recognizes revenue in accordance with FASB ASC Topic 605, Revenue Recognition (“ASC 605”). Accordingly, the Company recognizes revenue when all of the following criteria have been met: i. Persuasive evidence of an arrangement exists ii. Delivery has occurred or services have been rendered iii. The seller’s price to the buyer is fixed or determinable iv. Collectability is reasonably assured If any of the above criteria have not been met, the Company defers revenue until such time each of the criteria have been satisfied. Product revenue is generated by the sale of T2Dx and consumable diagnostic tests. The Company either directly sells the T2Dx to customers, or retains title and places the T2Dx at the customer site pursuant to a reagent rental agreement. When a T2Dx is directly purchased by a customer, the Company generally recognizes revenue upon completion of the installation of the T2Dx at the customer location. When a T2Dx is placed under a reagent rental agreement, the Company’s customers generally agree to longer-term agreements, minimum purchase commitments and/or pay an incremental charge on each consumable diagnostic test purchased, which varies based on the monthly volume of test cartridges purchased. Revenue from the sale of consumable diagnostic tests, which includes the incremental charge, is generally recognized upon shipment as a component of product revenue in the Company’s consolidated statements of operations and comprehensive loss. Direct sales of T2Dx include warranty, maintenance and technical support services for one year following the installation of the purchased T2Dx (“Maintenance Services”). After the completion of the initial Maintenance Services period, customers have the option to renew the Maintenance Services for additional one year periods in exchange for additional consideration. In addition, the Company may provide training to customers. The Company defers revenue from the initial sale of T2Dx equal to the relative fair value of the Maintenance Services and training and recognizes the amounts ratably over the service delivery period. The Company warrants that consumable diagnostic tests will be free from defects, when handled according product specifications, for the stated life of the product. To fulfill valid warranty claims, the Company provides a credit to its customers on future orders. Accordingly, the Company defers revenue associated with the estimated defect rates of the consumable diagnostic tests. The Company does not offer rights of return for the T2Dx or consumable diagnostic tests. Shipping and handling costs incurred associated with products sold to customers are recorded as a cost of product revenue in the consolidated statement of operations and comprehensive loss. Shipping and handling costs billed to customers in connection with a product sale are recorded as a component of product revenue in the consolidated statements of operations and comprehensive loss. For multiple-element arrangements, the Company identifies the deliverables included within each agreement and evaluates which deliverables represent separate units of accounting. The determination that multiple elements in an arrangement meet the criteria for separate units of accounting requires the Company’s management to exercise its judgment. The Company accounts for those components as separate elements when the following criteria are met: (1) the delivered items have value to the customer on a stand-alone basis; and, (2) if there is a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and within its control. The consideration received is allocated among the separate units of accounting based on a selling price hierarchy. The selling price hierarchy is based on: (1) vendor specific objective evidence (“VSOE”), if available; (2) third party evidence of selling price if VSOE is not available; or (3) best estimated selling price (“BESP”) if neither VSOE nor third party evidence is available. The Company generally expects that it will not be able to establish selling price using third-party evidence due to the nature of our products and the markets in which we compete, and, as such, we typically will determine selling price using VSOE or BESP. When the Company establishes selling price using BESP, consideration is given to both market and Company-specific factors, including the cost to produce the deliverable and the anticipated margin on that deliverable, as well as the characteristics of markets in which the deliverable is sold. Revenue earned from activities performed pursuant to research and development agreements is reported as research revenue in the consolidated statements of operations and comprehensive loss, and is recognized using the proportional performance method as the work is completed, limited to payments earned, and the related costs are expensed as incurred as research and development expense. The timing of receipt of cash from the Company’s research and development agreements generally differs from when revenue is recognized. Cost of Revenues Cost of product revenue includes the cost of materials, direct labor and manufacturing overhead costs used in the manufacture of our consumable diagnostic tests sold to customers and related license and royalty fees. Cost of product revenue also includes depreciation on revenue generating T2Dx that have been placed with customers under reagent rental agreements; costs of materials, direct labor and manufacturing overhead costs on T2Dx sold to customers; and other costs such as customer support costs, warranty and repair and maintenance expense on T2Dx that have been placed with customers under reagent rental agreements. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). The standard simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value for entities using the first-in-first out method of valuing inventory. ASU 2015-11 eliminates other measures required by current guidance to determine net realizable value. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years and early adoption is permitted. The Company has not adopted ASU 2015-11 and does not expect the new guidance to have a material effect on its condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2015-05”). The standard clarifies that customers in cloud computing arrangements should determine whether the arrangement includes a license of software by applying the same guidance as cloud service providers and eliminates the existing requirement for customers to account for software licenses acquired by analogizing to the guidance on leases. It is effective for annual periods beginning on or after December 15, 2015, including interim periods within those annual periods, and early adoption is permitted. Adoption of ASU 2015-05 can either be applied (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. The Company has not adopted the guidance prescribed by ASU 2015-05 and does not expect the new guidance to have a material effect on its condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). This standard amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. Adoption of ASU 2015-03 is applied retrospectively. The Company has not adopted the guidance prescribed by ASU 2015-03 and does not expect the new guidance to have a material effect on its condensed consolidated financial statements. In June 2014, the FASB issued amended guidance, ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which is applicable to revenue recognition that will now be effective for the Company for the year ending December 31, 2018, as a result of the deferral of the effective date adopted by the FASB in July 2015. The new guidance must be adopted using either a full retrospective approach for all periods presented or a modified retrospective approach. Early adoption prior to the original adoption date of ASU 2014-09 is not permitted. The new guidance applies a more principles-based approach to revenue recognition. The Company is evaluating the new guidance and the expected effect on the Company’s condensed consolidated financial statements.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2015
Fair Value Measurements
Fair Value Measurements	3. Fair Value Measurements The Company measures the following financial assets at fair value on a recurring basis. The following tables set forth the Company’s financial assets carried at fair value categorized using the lowest level of input applicable to each financial instrument as of September 30, 2015 and December 31, 2014 (in thousands): Balance at September 30, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash $ $ $ — $ — Money market funds — — Restricted cash — — $ $ $ — $ — Balance at December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash $ $ $ — $ — Money market funds — — Restricted cash — — $ $ $ — $ — For certain financial instruments, including accounts payable and accrued expenses, the carrying amounts approximate their fair values as of September 30, 2015 and December 31, 2014 because of their short-term nature. At September 30, 2015 and December 31, 2014, the carrying value of the Company’s debt approximated fair value, which was determined using Level 3 inputs, including a market interest rate.

Supplemental Balance Sheet Info

Supplemental Balance Sheet Information	9 Months Ended
	Sep. 30, 2015
Supplemental Balance Sheet Information
Supplemental Balance Sheet Information	4. Supplemental Balance Sheet Information Inventories Inventories are stated at the lower of cost or market value on a first-in, first-out basis and are comprised of the following (in thousands): September 30, December 31, 2015 2014 Raw materials $ $ Work-in-process Finished goods — Total inventories $ $ Property and Equipment Property and equipment consists of the following (in thousands): September 30, 2015 December 31, 2014 Office and computer equipment $ $ Software Laboratory equipment Furniture Manufacturing tooling and molds Leasehold improvements T2Dx and components Construction in progress Less accumulated depreciation and amortization ) ) Property and equipment, net $ $ Construction in progress is primarily comprised of equipment and leasehold improvement construction projects that have not been placed in service. T2Dx and components is comprised of raw materials and work-in-process inventory that are expected to be used or used to produce Company-owned instruments, based on the Company’s business model and forecast, and completed instruments that will be used for internal research and development or reagent rental agreements with customers. Completed T2Dx are placed in service once installation procedures are completed and are depreciated over five years. Depreciation expense for Company-owned T2Dx placed at customer sites pursuant to reagent rental agreements is recorded as a component of cost of product revenue and totaled approximately $28,000 for the three and nine months ended September 30, 2015. Depreciation expense for T2Dx used for internal research and development is recorded as a component of research and development expense. Accrued Expenses Accrued expenses consist of the following (in thousands): September 30, December 31, 2015 2014 Accrued payroll and compensation $ $ Accrued research and development expenses Accrued professional services Other accrued expenses Total accrued expenses $ $

Debt

Debt	9 Months Ended
	Sep. 30, 2015
Debt
Debt	5. Debt On July 11, 2014, the Company entered into a loan and security agreement (“Note Agreement”) with two lenders to borrow up to $30.0 million for operations. The Note Agreement allows the Company to borrow amounts in two tranches, up to $20.0 million (drawn in amounts not less than $10.0 million upon closing and the remainder drawn in amounts not less than $5.0 million draws) for tranche A and up to $10.0 million for tranche B. The Company borrowed the full $20.0 million available under tranche A by December 31, 2014. Under the Note Agreement, borrowings under tranche B are only available to the Company if both of the following conditions are met by June 30, 2015: (a) the Company receives Section 510(k) clearance from the FDA on the Company’s T2Dx and T2Candida products and (b) the Company completes a public or private stock offering, equity raise or strategic partner arrangement resulting in the receipt of at least $30.0 million in net proceeds by the Company. As the Company received FDA approval in September 2014 and the Company closed its initial public offering in August 2014, the borrowings under tranche B are now available as both of the required conditions have been met. In May 2015, the Company entered into the First Amendment to the Note Agreement whereby the availability to draw up to $10.0 million for tranche B was extended from June 30, 2015 to December 31, 2015. Commencing July 1, 2015, the Company incurs a fee equal to 1.0% per annum of any undrawn amounts under tranche B. This fee is payable on the date tranche B is drawn or upon the expiration of the draw period. All other terms of the Note Agreement remain in effect. In October 2015, the Company entered into the Second Amendment to the Note Agreement to enable the Company to enter into the Equipment Lease Facility (Note 8). Through September 30, 2015, the Company received proceeds of $19.7 million under tranche A, net of issuance costs. To date, the Company has not drawn the remaining tranche B available borrowings of $10.0 million. The amounts borrowed under the Note Agreement are collateralized by substantially all of the assets of the Company and bear interest at the one-month LIBOR plus 7.05%, which was 7.25% on September 30, 2015. The Company will pay interest only payments on the amounts borrowed under the Note Agreement through July 31, 2016. After the interest only period, the Company will repay the amounts borrowed in equal monthly installments until the maturity date of July 1, 2019. The Note Agreement requires payment of a final fee of 4.75% of the aggregate original principal of amounts borrowed, which the Company is accruing over the term of the Note Agreement. In addition, amounts borrowed may be prepaid at the option of the Company in denominations of not less than $1.0 million, and any amounts prepaid are subject to a prepayment premium of 1.5% if prepaid prior to the first anniversary of the borrowing date, 1.0% if prepaid prior to the second anniversary of the borrowing date and after the first anniversary of the borrowing date, and 0.5% if prepaid prior to the maturity date and after the second anniversary of the borrowing date. The effective interest rate for the Note Agreement, including final fee interest and non-cash interest, is 9.5%. The Note Agreement does not include any financial covenants, but does contain a subjective acceleration clause whereby upon an event of default, which includes a material adverse change in the business, operations, or conditions (financial or otherwise) of the Company or a material impairment of the prospect of repayment of any portion of the obligations, the lender may accelerate the Company’s repayment obligations under the Note Agreement. In the event of default, the lender has first priority to substantially all of the Company’s assets. The lender has not exercised its right under this clause, as there have been no such events. The Company believes the likelihood of the lender exercising this right is remote. The Company assessed all terms and features of the Note Agreement in order to identify any potential embedded features that would require bifurcation or any beneficial conversion features. As part of this analysis, the Company assessed the economic characteristics and risks of the Note Agreement, including put and call features. The Company determined that all features of the Note Agreement are clearly and closely associated with a debt host and do not require bifurcation as a derivative liability, or the fair value of the feature is immaterial. The Company will continue to reassess the features to determine if they require separate accounting on a quarterly basis.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2015
Stockholders' Equity
Stockholders' Equity	6. Stockholders’ Equity Stock-Based Compensation 2006 Stock Incentive Plan The Company’s 2006 Stock Option Plan (“2006 Plan”) was established for granting stock incentive awards to directors, officers, employees and consultants of the Company. Upon closing of the Company’s IPO in August 2014, the Company ceased granting stock incentive awards under the 2006 Plan. The 2006 Plan provided for the grant of incentive and non-qualified stock options and restricted stock grants as determined by the Company’s board of directors. Under the 2006 Plan, stock options were generally granted with exercise prices equal to or greater than the fair value of the common stock as determined by the board of directors, expired no later than 10 years from the date of grant, and vest over various periods not exceeding 4 years. 2014 Stock Incentive Plan The Company’s 2014 Plan (“2014 Plan”, and together with the 2006 Plan, the “Plans”) provides for the issuance of shares of common stock in the form of stock options, awards of restricted stock, awards of restricted stock units, performance awards, dividend equivalent awards, stock payment awards and stock appreciation rights to directors, officers, employees and consultants of the Company. Since the establishment of the 2014 Plan, the Company has only granted stock options. Generally, stock options are granted with exercise prices equal to or greater than the fair value of the common stock on the date of grant, expire no later than 10 years from the date of grant, and vest over various periods not exceeding 4 years. The number of shares reserved for future issuance under the 2014 Plan is the sum of (1) 823,529 shares, (2) any shares that were granted under the 2006 Plan which are forfeited, lapsed unexercised or are settled in cash subsequent to the effective date of the 2014 Plan and (3) an annual increase on the first day of each calendar year beginning January 1, 2015 and ending on January 1, 2024, equal to the lesser of (A) 823,529 shares, (B) 4% of the shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year, and (C) such smaller number of shares determined by the Company’s board of directors. As of September 30, 2015 there were 524,330 shares available for future grant under the 2014 Plan. Stock Options During the nine months ended September 30, 2015, the Company granted options with an aggregate fair value of $8.6 million, which are being amortized into compensation expense over the vesting period of the options as the services are being provided. The following is a summary of option activity under the Plans: Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (In years) Aggregate Intrinsic Value (In thousands) Outstanding at December 31, 2014 $ $ Granted Exercised ) Cancelled ) Outstanding at September 30, 2015 Exercisable at September 30, 2015 Vested or expected to vest at September 30, 2015 The weighted-average fair values of options granted in the nine-month periods ended September 30, 2015 and 2014 were $8.91 per share and $5.71 per share, respectively, and were calculated using the following estimated assumptions: Nine Months Ended September 30, 2015 2014 Weighted-average risk-free interest rate % % Expected dividend yield % % Expected volatility % % Expected terms 5.9 years 6.0 years Employee Stock Purchase Plan The Company’s 2014 Employee Stock Purchase Plan (the “2014 ESPP”) provides initially for granting up to 220,588 shares of the Company’s common stock to eligible employees. The 2014 ESPP plan period is semi-annual and allows participants to purchase the Company’s common stock at 85% of the lower of (i) the market value per share of common stock on the first day of the offering period or (ii) the market value per share of the common stock on the purchase date. Each participant can purchase up to a maximum of $25,000 per calendar year in fair market value of such shares of common stock, as determined by the market value per share of common stock at the beginning of the offering period. The Company issued 33,224 shares of common stock for total proceeds of $404,000 upon completion of the offering period ended April 30, 2015. The current offering period commenced on May 1, 2015 and ends November 15, 2015. Stock-based compensation expense from the 2014 ESPP for the three and nine-months ended September 30, 2015 was $66,000 and $192,000, respectively. Stock-Based Compensation Expense The following table summarizes the stock-based compensation expense resulting from awards granted under stock incentive plans, including the 2014 ESPP, that was recorded in the Company’s results of operations for the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Research and development $ $ $ $ Selling, general and administrative Total stock-based compensation expense $ $ $ $ As of September 30, 2015, there was $12.1 million of total unrecognized compensation cost related to unvested stock options granted under the Plans. Total unrecognized compensation cost will be adjusted for future changes in the estimated forfeiture rate. The Company expects to recognize that cost over a remaining weighted-average period of 3.0 years as of September 30, 2015.

Net Loss Per Share

Net Loss Per Share	9 Months Ended
	Sep. 30, 2015
Net Loss Per Share
Net Loss Per Share	7. Net Loss Per Share Excluded from the calculation of diluted net loss per share applicable to common stockholders, prior to the application of the treasury stock method, were 3,470,936 and 2,791,317 shares, for the three and nine month periods ended September 30, 2015 and 2014, respectively, related to options to purchase common shares. The shares are excluded because their effect would have been anti-dilutive for the periods presented.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies.
Commitments and Contingencies	8. Commitments and Contingencies Lease Amendments In May 2015, the Company entered into an amendment to a lease to expand existing manufacturing facilities. The lease amendment term is June 1, 2015 to December 31, 2017, and the annual rent for the expansion space is $66,000. In May 2015, the Company entered into an amendment to a lease to extend the term of the lease for office and laboratory space at the Company’s headquarters in Lexington, MA. The lease term will now extend from December 31, 2015 to December 31, 2017. The annual rent for the extension period is $1.1 million for 2016 and $1.2 million for 2017. In April 2015, the Company entered into an amendment to extend the term of an office space lease. The lease amendment extends the lease term from December 31, 2016 to December 31, 2017 and the annual rent for the additional year is approximately $300,000. Equipment Lease Facility In October 2015, the Company signed a $10.0 million Facility to fund capital equipment needs. Under the Facility, the lessor will fund capital equipment purchases presented. The Company will repay the amounts borrowed in 36 equal monthly installments from the date of the amount funded. At the end of the 36 month lease term, the Company has the option to (a) repurchase the leased equipment at the lesser of fair market value or 10% of the original equipment value, (b) extend the applicable lease for a specified period of time, which will not be less than one year, or (c) return the leased equipment to the lessor.

Co-Development Agreement with C

Co-Development Agreement with Canon US Life Sciences	9 Months Ended
	Sep. 30, 2015
Co-Development Agreement with Canon US Life Sciences
Co-Development Agreement with Canon US Life Sciences	9. Co-Development Agreement with Canon US Life Sciences On February 3, 2015, the Company entered into a Co-Development Partnership Agreement (the “Co-Development Agreement”) with Canon U.S. Life Sciences, Inc. (“Canon US Life Sciences”) to develop a diagnostic test panel to rapidly detect Lyme disease. Under the terms of the Co-Development Agreement, the Company received an upfront payment of $2.0 million from Canon US Life Sciences and may receive an additional $6.5 million of consideration upon achieving certain development and regulatory milestones for total aggregate payments of up to $8.5 million. In October 2015, the Company achieved a specified technical requirement and is eligible to receive $1.5 million, related to the achievement of the milestone. The Company is eligible to receive an additional $5.0 million under the arrangement, in two milestone payments of $2.0 million and $3.0 million, related to the achievement of additional development and regulatory milestones. All payments under the Co-Development Agreement are non-refundable once received. The Company will retain exclusive worldwide commercialization rights of any products developed under the Co-Development Agreement, including sales, marketing and distribution and Canon US Life Sciences will not receive any commercial right and will be entitled to only receive royalty payments on the sales of all products developed under the Co-Development Agreement. Either party may terminate the Co-Development Agreement upon the occurrence of a material breach by the other party (subject to a cure period). The Company evaluated the deliverables under the Co-Development Agreement and determined that the Co-Development Agreement included one unit of accounting, the research and development services, as the joint research and development committee deliverable was deemed to be de minimus. The Company is recognizing revenue for research and development services as a component of research revenue in the condensed consolidated financial statements as the services are delivered using the proportional performance method of accounting, limited to payments earned. Costs incurred to deliver the services under the Co-Development Agreement are recorded as research and development expense in the condensed consolidated financial statements. The Company recorded revenue of $469,000 and $846,000 during the three and nine months ended September 30, 2015, respectively, under the Co-Development Agreement.

Summary of Significant Accoun15

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The Company’s financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States GAAP as defined in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The Company’s condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, T2 Biosystems Securities Corporation. All intercompany balances and transactions have been eliminated.
Unaudited Interim Financial Information	Unaudited Interim Financial Information Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying interim condensed consolidated balance sheet as of September 30, 2015, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2015 and 2014, the condensed consolidated statements of cash flows for the nine months ended September 30, 2015 and 2014 and the related financial data and other information disclosed in these notes are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2015, and the results of its operations and its cash flows for the three and nine months ended September 30, 2015 and 2014. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015, any other interim periods, or any future year or period.
Segment Information	Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company views its operations and manages its business in one operating segment, which is the business of developing and launching commercially its diagnostic products aimed at reducing mortality rates, improving patient outcomes and reducing the cost of healthcare by helping medical professionals make targeted treatment decisions earlier.
Net Loss Per Share	Net Loss Per Share Basic net loss per share is calculated by dividing net loss applicable to common stockholders, which is net loss plus accretion of redeemable convertible preferred stock to redemption value in the period, by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method for outstanding stock options and warrants. For purposes of the diluted net loss per share calculation, redeemable convertible preferred stock and warrants to purchase redeemable convertible preferred stock outstanding prior to the August 2014 initial public offering and stock options are considered to be common stock equivalents, but have been excluded from the calculation of diluted net loss per share, as their effect, including the related impact to the numerator of the fair value adjustment of the warrant and the impact to the denominator of the warrant shares, would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share applicable to common stockholders was the same for all periods presented.
Guarantees	Guarantees From time to time, the Company enters into indemnification agreements in the ordinary course of business, including, but not limited to, indemnification agreements with directors and officers, within its lease agreements for office, laboratory and manufacturing space, and with certain suppliers and business partners. As of September 30, 2015 and December 31, 2014, the Company had not experienced any material losses related to these indemnification obligations, and no material claims with respect thereto were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established.
Revenue Recognition	Revenue Recognition The Company generates revenue from product sales, which includes the sale of T2Dx, consumable diagnostic tests and related services, and research and development agreements with third parties. The Company recognizes revenue in accordance with FASB ASC Topic 605, Revenue Recognition (“ASC 605”). Accordingly, the Company recognizes revenue when all of the following criteria have been met: i. Persuasive evidence of an arrangement exists ii. Delivery has occurred or services have been rendered iii. The seller’s price to the buyer is fixed or determinable iv. Collectability is reasonably assured If any of the above criteria have not been met, the Company defers revenue until such time each of the criteria have been satisfied. Product revenue is generated by the sale of T2Dx and consumable diagnostic tests. The Company either directly sells the T2Dx to customers, or retains title and places the T2Dx at the customer site pursuant to a reagent rental agreement. When a T2Dx is directly purchased by a customer, the Company generally recognizes revenue upon completion of the installation of the T2Dx at the customer location. When a T2Dx is placed under a reagent rental agreement, the Company’s customers generally agree to longer-term agreements, minimum purchase commitments and/or pay an incremental charge on each consumable diagnostic test purchased, which varies based on the monthly volume of test cartridges purchased. Revenue from the sale of consumable diagnostic tests, which includes the incremental charge, is generally recognized upon shipment as a component of product revenue in the Company’s consolidated statements of operations and comprehensive loss. Direct sales of T2Dx include warranty, maintenance and technical support services for one year following the installation of the purchased T2Dx (“Maintenance Services”). After the completion of the initial Maintenance Services period, customers have the option to renew the Maintenance Services for additional one year periods in exchange for additional consideration. In addition, the Company may provide training to customers. The Company defers revenue from the initial sale of T2Dx equal to the relative fair value of the Maintenance Services and training and recognizes the amounts ratably over the service delivery period. The Company warrants that consumable diagnostic tests will be free from defects, when handled according product specifications, for the stated life of the product. To fulfill valid warranty claims, the Company provides a credit to its customers on future orders. Accordingly, the Company defers revenue associated with the estimated defect rates of the consumable diagnostic tests. The Company does not offer rights of return for the T2Dx or consumable diagnostic tests. Shipping and handling costs incurred associated with products sold to customers are recorded as a cost of product revenue in the consolidated statement of operations and comprehensive loss. Shipping and handling costs billed to customers in connection with a product sale are recorded as a component of product revenue in the consolidated statements of operations and comprehensive loss. For multiple-element arrangements, the Company identifies the deliverables included within each agreement and evaluates which deliverables represent separate units of accounting. The determination that multiple elements in an arrangement meet the criteria for separate units of accounting requires the Company’s management to exercise its judgment. The Company accounts for those components as separate elements when the following criteria are met: (1) the delivered items have value to the customer on a stand-alone basis; and, (2) if there is a general right of return relative to the delivered items, delivery or performance of the undelivered items is considered probable and within its control. The consideration received is allocated among the separate units of accounting based on a selling price hierarchy. The selling price hierarchy is based on: (1) vendor specific objective evidence (“VSOE”), if available; (2) third party evidence of selling price if VSOE is not available; or (3) best estimated selling price (“BESP”) if neither VSOE nor third party evidence is available. The Company generally expects that it will not be able to establish selling price using third-party evidence due to the nature of our products and the markets in which we compete, and, as such, we typically will determine selling price using VSOE or BESP. When the Company establishes selling price using BESP, consideration is given to both market and Company-specific factors, including the cost to produce the deliverable and the anticipated margin on that deliverable, as well as the characteristics of markets in which the deliverable is sold. Revenue earned from activities performed pursuant to research and development agreements is reported as research revenue in the consolidated statements of operations and comprehensive loss, and is recognized using the proportional performance method as the work is completed, limited to payments earned, and the related costs are expensed as incurred as research and development expense. The timing of receipt of cash from the Company’s research and development agreements generally differs from when revenue is recognized.
Cost of Revenues	Cost of Revenues Cost of product revenue includes the cost of materials, direct labor and manufacturing overhead costs used in the manufacture of our consumable diagnostic tests sold to customers and related license and royalty fees. Cost of product revenue also includes depreciation on revenue generating T2Dx that have been placed with customers under reagent rental agreements; costs of materials, direct labor and manufacturing overhead costs on T2Dx sold to customers; and other costs such as customer support costs, warranty and repair and maintenance expense on T2Dx that have been placed with customers under reagent rental agreements.
Recent Accounting Pronouncements	Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). The standard simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value for entities using the first-in-first out method of valuing inventory. ASU 2015-11 eliminates other measures required by current guidance to determine net realizable value. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years and early adoption is permitted. The Company has not adopted ASU 2015-11 and does not expect the new guidance to have a material effect on its condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2015-05”). The standard clarifies that customers in cloud computing arrangements should determine whether the arrangement includes a license of software by applying the same guidance as cloud service providers and eliminates the existing requirement for customers to account for software licenses acquired by analogizing to the guidance on leases. It is effective for annual periods beginning on or after December 15, 2015, including interim periods within those annual periods, and early adoption is permitted. Adoption of ASU 2015-05 can either be applied (1) prospectively to all arrangements entered into or materially modified after the effective date or (2) retrospectively. The Company has not adopted the guidance prescribed by ASU 2015-05 and does not expect the new guidance to have a material effect on its condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”). This standard amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015, but early adoption is permitted. Adoption of ASU 2015-03 is applied retrospectively. The Company has not adopted the guidance prescribed by ASU 2015-03 and does not expect the new guidance to have a material effect on its condensed consolidated financial statements. In June 2014, the FASB issued amended guidance, ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which is applicable to revenue recognition that will now be effective for the Company for the year ending December 31, 2018, as a result of the deferral of the effective date adopted by the FASB in July 2015. The new guidance must be adopted using either a full retrospective approach for all periods presented or a modified retrospective approach. Early adoption prior to the original adoption date of ASU 2014-09 is not permitted. The new guidance applies a more principles-based approach to revenue recognition. The Company is evaluating the new guidance and the expected effect on the Company’s condensed consolidated financial statements.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value Measurements
Schedule of financial assets and liabilities at fair value on a recurring basis	The following tables set forth the Company’s financial assets carried at fair value categorized using the lowest level of input applicable to each financial instrument as of September 30, 2015 and December 31, 2014 (in thousands): Balance at September 30, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash $ $ $ — $ — Money market funds — — Restricted cash — — $ $ $ — $ — Balance at December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash $ $ $ — $ — Money market funds — — Restricted cash — — $ $ $ — $ —

Supplemental Balance Sheet In17

Supplemental Balance Sheet Information (Tables)	9 Months Ended
	Sep. 30, 2015
Supplemental Balance Sheet Information
Schedule of inventory	Inventories are stated at the lower of cost or market value on a first-in, first-out basis and are comprised of the following (in thousands): September 30, December 31, 2015 2014 Raw materials $ $ Work-in-process Finished goods — Total inventories $ $
Schedule of property and equipment	Property and equipment consists of the following (in thousands): September 30, 2015 December 31, 2014 Office and computer equipment $ $ Software Laboratory equipment Furniture Manufacturing tooling and molds Leasehold improvements T2Dx and components Construction in progress Less accumulated depreciation and amortization ) ) Property and equipment, net $ $
Components of accrued expenses	Accrued expenses consist of the following (in thousands): September 30, December 31, 2015 2014 Accrued payroll and compensation $ $ Accrued research and development expenses Accrued professional services Other accrued expenses Total accrued expenses $ $

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	9 Months Ended
	Sep. 30, 2015
Stockholders' Equity
Summary of stock option activity	Number of Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (In years) Aggregate Intrinsic Value (In thousands) Outstanding at December 31, 2014 $ $ Granted Exercised ) Cancelled ) Outstanding at September 30, 2015 Exercisable at September 30, 2015 Vested or expected to vest at September 30, 2015
Schedule of estimated assumptions used to calculate weighted-average fair value of options granted	Nine Months Ended September 30, 2015 2014 Weighted-average risk-free interest rate % % Expected dividend yield % % Expected volatility % % Expected terms 5.9 years 6.0 years
Summary of stock-based compensation expense for stock options granted that was recorded in the Company's results of operations	The following table summarizes the stock-based compensation expense resulting from awards granted under stock incentive plans, including the 2014 ESPP, that was recorded in the Company’s results of operations for the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Research and development $ $ $ $ Selling, general and administrative Total stock-based compensation expense $ $ $ $

Nature of Business (Details)

Nature of Business (Details) - USD ($) $ in Thousands	Aug. 12, 2014	Oct. 31, 2015	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Jul. 11, 2014	Dec. 31, 2013
Cash and cash equivalents			$ 40,117	$ 73,849	$ 75,589		$ 30,198
Accumulated deficit			$ (136,853)	$ (103,595)
Period over which cash resources will be sufficient to allow Company to fund current operating plan	12 months
Equipment lease facility
Maximum borrowings available		$ 10,000
Note Agreement 1
Remaining borrowing capacity						$ 10,000
Maximum borrowings available						$ 30,000

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Details)	9 Months Ended
	Sep. 30, 2015segment
Segment Information
Number of Operating Segments	1

Summary of Significant Accoun21

Summary of Significant Accounting Policies (Details 2) - T2Dx	9 Months Ended
	Sep. 30, 2015
Product information
Maintenance Services period (in years)	1 year
Additional period for Maintenance Service option (in years)	1 year

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Recurring - Fair value - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets:
Restricted cash	$ 260	$ 340
Total assets	40,377	74,189
Cash
Assets:
Cash and cash equivalents	2,114	10,348
Money market funds
Assets:
Cash and cash equivalents	38,003	63,501
Level 1
Assets:
Restricted cash	260	340
Total assets	40,377	74,189
Level 1 | Cash
Assets:
Cash and cash equivalents	2,114	10,348
Level 1 | Money market funds
Assets:
Cash and cash equivalents	$ 38,003	$ 63,501

Supplemental Balance Sheet In23

Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Supplemental Balance Sheet Information
Raw materials	$ 545	$ 71
Work-in-process	451	44
Finished goods	61
Total inventories	$ 1,057	$ 115

Supplemental Balance Sheet In24

Supplemental Balance Sheet Information (Details 2) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2014
Property and Equipment
Property and equipment, gross	$ 13,769,000	$ 13,769,000	$ 6,102,000
Accumulated depreciation and amortization	(4,321,000)	(4,321,000)	(3,342,000)
Property and equipment, net	9,448,000	9,448,000	2,760,000
Accrued expenses
Accrued payroll and compensation	2,524,000	2,524,000	1,846,000
Accrued research and development expenses	365,000	365,000	733,000
Accrued professional services	403,000	403,000	374,000
Other accrued expenses	999,000	999,000	709,000
Total accrued expenses	4,291,000	4,291,000	3,662,000
Office and computer equipment
Property and Equipment
Property and equipment, gross	395,000	395,000	383,000
Software
Property and Equipment
Property and equipment, gross	623,000	623,000	480,000
Laboratory equipment
Property and Equipment
Property and equipment, gross	3,842,000	3,842,000	3,312,000
Furniture
Property and Equipment
Property and equipment, gross	187,000	187,000	187,000
Manufacturing tooling and molds
Property and Equipment
Property and equipment, gross	71,000	71,000	26,000
Leasehold improvements
Property and Equipment
Property and equipment, gross	3,158,000	3,158,000	764,000
T2Dx and components
Property and Equipment
Property and equipment, gross	4,026,000	$ 4,026,000	563,000
Estimated useful lives		5 years
Depreciation expense recorded as a component of cost of product revenue	28,000	$ 28,000
Construction in progress
Property and Equipment
Property and equipment, gross	$ 1,467,000	$ 1,467,000	$ 387,000

Debt (Details)

Debt (Details) $ in Thousands	Jul. 11, 2014USD ($)trancheitem	May. 31, 2015USD ($)	Dec. 31, 2014USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)
Debt Instrument [Line Items]
Proceeds from notes payable, net of issuance costs					$ 9,800
Note Agreement 1
Debt Instrument [Line Items]
Number of lenders | item	2
Maximum borrowings available	$ 30,000
Number of tranches | tranche	2
Remaining borrowing capacity	$ 10,000
Interest rate including both the variable rate and the basis spread (as a percent)				7.25%		7.25%
Final fee as a percentage of original principal amount of amounts borrowed	4.75%
Minimum amount of denomination for prepayment of borrowings	$ 1,000
Effective interest rate including final fee interest and non-cash interest (as a percent)				9.50%
Note Agreement 1 | Prior to first anniversary of borrowing date
Debt Instrument [Line Items]
Prepayment premium (as a percent)	1.50%
Note Agreement 1 | Prior to second anniversary and after first anniversary of borrowing date
Debt Instrument [Line Items]
Prepayment premium (as a percent)	1.00%
Note Agreement 1 | Prior to maturity date and after second anniversary of borrowing date
Debt Instrument [Line Items]
Prepayment premium (as a percent)	0.50%
Note Agreement 1 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	one-month LIBOR
Basis spread (as a percent)	7.05%
Note Agreement 1 | Tranche A
Debt Instrument [Line Items]
Maximum borrowings available	$ 20,000
Minimum amount of draw upon closing	10,000
Minimum amount of draw after closing	5,000
Proceeds from issuance of debt			$ 20,000
Proceeds from notes payable, net of issuance costs						$ 19,700
Note Agreement 1 | Tranche B
Debt Instrument [Line Items]
Maximum borrowings available	10,000	$ 10,000
Minimum net proceeds to be received from stock offering, equity raise, or strategic partner arrangement to allow for borrowing	$ 30,000
Commitment fee on undrawn principal (as a percent)		1.00%
Remaining borrowing capacity				$ 10,000		$ 10,000

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($)	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Apr. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Share-Based Compensation
Stock-based compensation expense	$ 1,322,000	$ 552,000		$ 2,899,000	$ 1,057,000
Employee Stock Purchase Plan
Share-Based Compensation
Shares available for grant	220,588			220,588
Percentage of full share price paid in purchase of common stock	85.00%			85.00%
Maximum amount of annual employee common stock purchases				$ 25,000
Shares issued under employee stock purchase plan			33,224
Proceeds from issuance of awards under employee stock purchase plan			$ 404,000
Stock-based compensation expense	$ 66,000			192,000
2006 and 2014 Stock Option Plans | Options to purchase common shares
Share-Based Compensation
Aggregate fair value of options granted				$ 8,600,000
Number of Shares
Outstanding, beginning of the period (in shares)				2,911,146
Granted (in shares)				972,133
Exercised (in shares)				(264,393)
Cancelled (in shares)				(147,950)
Outstanding, end of the period (in shares)	3,470,936			3,470,936		2,911,146
Exercisable (in shares)	1,649,062			1,649,062
Vested or expected to vest (in shares)	3,238,718			3,238,718
Weighted Average Exercise Price Per Share
Outstanding, beginning of the period (in dollars per share)				$ 5.30
Granted (in dollars per share)				16.96
Exercised (in dollars per share)				2.89
Cancelled (in dollars per share				6.52
Outstanding, end of the period (in dollars per share)	$ 8.69			8.69		$ 5.30
Exercisable (in dollars per share)	4.36			4.36
Vested or expected to vest (in dollars per share)	$ 8.34			$ 8.34
Weighted-Average Remaining Contractual Term (in years)
Outstanding (in years)				7 years 7 months 21 days		7 years 10 months 13 days
Exercisable (in years)				6 years 1 month 28 days
Vested or expected to vest (in years)				7 years 6 months 11 days
Aggregate Intrinsic Value
Outstanding, beginning of the period				$ 40,586,000
Exercised				3,588,000
Outstanding, end of the period	$ 11,396,000			11,396,000		$ 40,586,000
Exercisable	8,850,000			8,850,000
Vested or expected to vest	$ 11,181,000			$ 11,181,000
Fair value assumptions
Weighted average fair value of options granted (in dollars per share)				$ 8.91	$ 5.71
Weighted-average risk-free interest rate				1.70%	1.93%
Expected dividend yield				0.00%	0.00%
Expected volatility				55.00%	61.00%
Expected terms				5 years 10 months 24 days	6 years
2006 Stock Option Plan | Maximum | Options to purchase common shares
Share-Based Compensation
Expiration Period				10 years
Vesting period				4 years
2014 Stock Option Plan | Options to purchase common shares
Share-Based Compensation
Common stock were reserved for issuance	823,529			823,529
Percentage of common shares outstanding				4.00%
Shares available for grant	524,330			524,330
2014 Stock Option Plan | Maximum | Options to purchase common shares
Share-Based Compensation
Expiration Period				10 years
Vesting period				4 years

Stockholders' Equity (Details 2

Stockholders' Equity (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Stock-based compensation expense
Stock-based compensation expense	$ 1,322	$ 552	$ 2,899	$ 1,057
Total unrecognized compensation costs related to non-vested stock options	12,100		$ 12,100
Remaining weighted-average period that unrecognized compensation costs are expected to be recognized			3 years
Research and development
Stock-based compensation expense
Stock-based compensation expense	440	127	$ 1,017	250
Selling, general and administrative
Stock-based compensation expense
Stock-based compensation expense	$ 882	$ 425	$ 1,882	$ 807

Net Loss Per Share (Details)

Net Loss Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Options to purchase common shares
Anti-dilutive securities
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)	3,470,936	2,791,317	3,470,936	2,791,317

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)	May. 31, 2015	Apr. 30, 2015
Operating lease entered into May 2015 | Manufacturing facility
Leases
Annual rent	$ 66,000
Operating lease entered into May 2015 | Office and laboratory space
Leases
Annual rent for 2016	1,100,000
Annual rent owed in 2017	$ 1,200,000
Operating leases entered into April 2015 | Office Space
Leases
Annual rent owed in 2017		$ 300,000

Commitments and Contingencies30

Commitments and Contingencies (Details 2) - Equipment lease facility $ in Millions	1 Months Ended
	Oct. 31, 2015USD ($)
Capital lease obligation
Maximum borrowings available	$ 10
Debt term (in months)	36 months
Repurchase price as percentage of original equipment value that the equipment under lease may be repurchased by lessee	10.00%
Minimum
Capital lease obligation
Renewal term (in years)	1 year

Co-Development Agreement with31

Co-Development Agreement with Canon US Life Sciences (Details)	Feb. 03, 2015USD ($)item	Sep. 30, 2015USD ($)item	Sep. 30, 2015USD ($)item	Oct. 31, 2015USD ($)
Co-Development Agreement with Canon US Life Sciences
Revenues		$ 1,049,000	$ 1,802,000
Co Development Partnership Agreement | Canon U.S. Life Sciences Inc.
Co-Development Agreement with Canon US Life Sciences
Upfront payment received	$ 2,000,000
Additional consideration receivable upon achievement of certain development and regulatory milestones	6,500,000
Aggregate consideration receivable	$ 8,500,000
Additional consideration receivable upon achievement of additional development and regulatory milestones		$ 5,000,000	$ 5,000,000
Number of milestone payments | item		2	2
Additional consideration receivable upon achievement of development and regulatory milestones, payment one		$ 2,000,000	$ 2,000,000
Additional consideration receivable upon achievement of development and regulatory milestones, payment two		3,000,000	3,000,000
Number of units | item	1
Revenues		$ 469,000	$ 846,000
Co Development Partnership Agreement | Canon U.S. Life Sciences Inc. | Subsequent Event
Co-Development Agreement with Canon US Life Sciences
Consideration eligible to receive upon achievement of specified technical requirement related to the achievement of the milestone				$ 1,500,000