TTOO - Earnings call transcript Q4 2018

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the T2 Biosystems Fourth Quarter and Full-Year 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. It is now my pleasure to turn the call over to Zack Kubow of W2O Group. sir. ahead, go Please

Zack Kubow

And TX everyone. full-year Biosystems call. results operator. us XXXX for for conference the fourth good you, Thanks afternoon joining financial Thank quarter and

for made discuss XXXX the XX, related President comments call will remarks management like John and and prepared and On Sprague. ended forward-looking McDonough, and are the to Biosystems’ for remind answers products. marketing followed plans a John with questions today future Financial call developing and and question-and-answer period. year some to new to that and I operational the would statements. everyone by open Those highlights Chief to financial by will the include CEO, and The results quarter include operating December team results statements Officer, TX executive

McDonough. on March company based time Forward-looking with no call to estimates described statements, law. may by materially the Biosystems’ and with report by like or as time. turn filings XX, are uncertainties of I'd annual other in actual implied to to assumptions John? the from results filed today from Form John and any that undertakes update President and SEC the risks obligation on uncertainties to over the except differ risks and expressed and The company publicly or cause as statements required that to to subject SEC and the revise makes XX-K statements TX XXXX forward-looking With CEO, are those including on those that,

John McDonough

of with and TX, test Combined FDA for the from by following out XXXX results and identify first as everyone, the and TXBacteria and afternoon, progress, you significant the only Panel, we outlook was year whole a to fourth sepsis-causing the cleared discuss XXXX. blood. quarter clearance Zack. joining for the full-year and you, infections direct market lead a launch ability bacteria more offer believe the sepsis. FDA patients can that we Good for of will whole for and Thank thank headlined tool to blood hospitals medicine been bloodstream now forms pursuit the significant past enable Panel, in earlier, a deadly The for a to century. bacterial culture therapy of effective infections identify without the blood TXCandida has we directly that to suspected results waiting fungal of from

the hampered while pharmaceutical more the means one which now of that US believe TXDirect that the the can most in rapidly effective recognizing difference infection, Diagnostics have for cause these hospitals mortality identify to medical community number of inability believe we develop condition government of billion and the hospitalization hospitals. infection. fight costs, $XX sepsis, is expensive actual Additionally, agencies been are means health that developed by companies their over preventing and utilization to the for have cause the We

Before Diagnostics, to FDA-cleared the mortality identified With enough, patient and huge treatment and poor results TXDirect product of step based a quickly a right X up believe from forward is blood TXDirect by of you suffering every an have a days' guess drug. system to hours to a with which upon. X than patients used sample every company in directly and sensitivity certain getting can that right lengthy rates accuracy, speed sepsis the for you system. a premise win patient's identify time, healthcare probability-based sensitivity are XX% infections targeted greater we from pathogens reduced X% on for for option a XX% other are the dependent cultures, patients to hour single sepsis six is the for offering blood if Due rate, which one in bloodstream time hospitals XX% with Diagnostics, to suspected frontline pathogens on

setting, result a detail, we X.XX the with institutions only sets, efforts required more in our of strong vanguard $XXX to as better antimicrobial becoming that by test that task found physicians I accurate believe discuss experience be option dedicated have and with are the all As stewardship can that guided and the hospitals culture Results have which TXBacteria are panel. as for TX one test all shown will rather on adjust is guesswork. to conscious infections. that a on benefit. systemic the bloodstream to in beginning show of clinical data identification disease diagnostics pathogen we infecting believe other And the where the hospital the is in progression economic that We be decisions patient arrived time willingness has treatment of based of protocol while change the actual the that early measurable believe antibiotic provides can

there we to willingness today. customer fast, we selling the an a within identify shown segment discuss and believe of to In opportunity institutions on engage move has which and call that adopt process our will addition, the is target

platform. which new During our initiative, market also further product XXXX, our we the our have opportunity for advanced other potential TXDx expand core to

recurring and into the in company that the the the of with sales initiatives quarter our reagent upfront come. remarks, an on margins our primarily XXXX Total growth enter costs fourth-quarter review detailed growth and of for Sprague, revenue revenue a Product remain for of believe as the high-level of we'll the and volume in customer to John growth our milestone TX, full-year to In execution and but revenue up on will compared minimal slightly $X.X provide product and, XXXX was to year. million. progress business the foundation significant testing launch selected XXXX, the our quarter, but results for years expectation. to that and a guidance. the commercial a with million QX a minimal sales. has were we our fourth outline together, financial was will focused review more provides outlook Capital key model TXBacteria results financial in Panel. the and which CFO, reflecting stable Taken After our TXCandida positioned overview which metrics new were sustained begin Panel and flat I year-over-year period has in results $X.X the our financial quarter, for the we of XXXX, rental stronger provide revenues heading of line therefore, customers related delivered were my

guidance. in we be the half full-year In XX we sold begun at puts with estimate continue To TXDx high-risk the on More well basis, put new access this placed in XX, TXCandida to customers us as TXDx patients, a contracts, all new secured XX we second in build these patients that in coming contract more to were a we begin provided. be to As contractor with of guidance securing to the of and this have revenue XX half of TXBacteria nearly number new will instruments, instruments Panel contracts, XXXX. the December provide in phase including the associated Panel year. high-end recurring XXXX, contracts over systems instrument, revenue expect of with prices already the momentum contribute the XXXX of covering testing second QX. This XX QX from recurring context, had than high-risk QX reminder, per some XX,XXX we previous specifically, related of contracts implementation in this total, TXDx year ahead to to placed utilization. in instrument and new XXX,XXX On to with previously

expected half six we we enter ended XXXX, the from of the the layer testing to year complete validation right sales. to begin to three with the of and will and the second we new contracts where Panel. month meaningful TXBacteria startup patients, begin XXXX TXBacteria we Panel expect which launch to As phase on Overall, the be

instrument pipeline sales but opportunity TXDirect in our Panel our in will to double opportunities revenue approximately short strong a consistent contracts, of with XX and we guidance. John full detail provide XXXX the TXBacteria remain we for expect guidance, entering XX deliver in prior total XXXX have We and the for confident on long-term to Diagnostics. new

into drive FDA update due into the XX points of feedback the we with and we've an growing sales Panel number contracts, there and against TXBacteria TXBacteria executing and from the hit are we a launch, the months on delivered we initiatives the the six to proposals we reviewed hospital in targets. and strong encouraging Panel data to We launch to demand. TXBacteria identifying the projected XXXX. saw the our And altered robust we continued of new our the XX our up of and hospitals Based believe and interested that following We're Panel from encouraged from have progress. in market leading quarter, analysis, several of key interest this recently TXBacteria. of have strategy while clearance the integrating are trend of marketing is pipeline fourth first Turning QX

securing each our for XXXX, the activity we no new as driving our quarter provide shift will utilization. will number of a contracts into proposal longer to and focus Moving result as

customer much XXXX our the our sepsis the States to management that the range expected terms educated the In half towards TXBacteria our patient faster clearly second of These Panel. such X by focus customers Said that closed had faster the active stewardship because is XX account more X the quickly that cycle cycle, customer Every of XX-month of we in the potential believe the new saw product. sales new of in our of the that launch focused half effort faster-closing that we buyer than We buyers of in in and potential wins moves XX balance to data. year than are TXCandida have the encouraged sales XX improving accounts closing to care. second a our we will analyzed of day XXXX. which to that of months following XXXX, appear in we contracts, best on closed with believe the were they second traditional United half from on new when more will the we sales are with fast process the is accounts see also average differently, Panel and number trending anything and typically that

in ensures to rapid this includes one our have interest We representatives maintain our hospital the our States to starting January, not territories this opportunities. fall team with and XX in over of more in in QX secured we sales into Given the accelerate of while order of solutions. the In reps which engaged their of a outreach XXX close potential account pipeline sales sales United that with more believe rate meetings with to may opportunities. we the traditional force, cycle, that could sales in dedicating additional hospitals engage that are new advancing XXXX, a accounts existing, were whom time also expressed first broad previously broad category,

implemented System who to on Lee the understood TXCandida received feedback medical testing sales the best maximize team our the of for TXDx process the utilization, process And the Panel customers led we've support new Sandy one and and QX our in accounts provided TXBacteria benefit growth positive startup will They in This terms believe our customer TXBacteria in of support by by liaison. value utilization. working service accounts. over patients. of with Estrada patients the at to starting of is practices in course The of activity year, Panel Health increase Panel directly XXXX. In Memorial by the are to more liaisons by medical validation satisfaction commercial as and the customers ensure we is go and live flagship sales Florida, and signed XXXX of the team strategies the showing their are team instruments

XXXX marketing of support the data TXDirect momentum launch front, clinical have the Panel of Panel of components expand TXBacteria planned Diagnostics is TXBacteria for awareness one activities to several platform. On and the campaigns of key the the the we the benefits Highlighting data results adoption the strategy we pivotal the as medical of our TXBacteria of trial year, of TXCandida importance seen in Panel. first published a of the Panel half the in we journal. the FDA of clinical this have In peer-reviewed the be to expect and

publication is data validator many an our a peer-reviewed of this in journal important and of physicians the healthcare For providers, technology.

Diseases, continue ECCMID, major presentation a ECCMID accepted scientific to already year, reported clinical course Amsterdam Panel, be in many TXDirect April XXth or expect evidence sponsoring to Congress studies expected of using Clinical will are for Microbiology results European five we April the take the more total, Infectious added US of European and In to the build experts with TXBacteria Over with have at to the & from XX we clinical which we at Diagnostics. in symposium posters place and XX. to

Diagnostics ECCMID, validation Presidential Antibiotic-Resistant PACCARB, February Advisory request have leading of into current data and multiple providing antibiotic-resistant XX, Tom On On customer we of our Tom highlight in our We next set. Lowery, technology. this priority a to several the receive will strong have also task the Scientific iteration combating opportunities and provided the year, to at additional presence the Officer, of At of Chief areas of TXBacteria US external January PACCARB, In TXDirect two meetings XXXX European and TXDirect Combating of Council XXXX March, the their in plan new our months on first DC. for identifying support information participated in bacteria. Bacteria, action Washington government's Diagnostics or national US for Panel in

not XX on TX biotech and world's was and FastCompany opportunity TXBacteria. on webcast live to based encourage In you to top the PACCARB. If from of launch a interest which the is have website by in ranked I of clearance companies now of Tom' PACCARB available the the and the did reply meeting, and technology our view you the participation, innovative the the February, view YouTube most highlights Biosystems at FDA

our this existing States, to professionals, managing new these covering have the We transforming In six of sales supporting also well parts shaping the Outside and industries Middle with honored and in XXXX, listed and that into marketing United countries. market a of TXBacteria we societies. with are international Europe while entry both of companies a team going and will on the focused be distributors, be and are emerging Panels, East. direct TXCandida mix known deeper team of

was calls, partnership used like which to product we late have pipeline, newest if technology. with expand our first-line plus several resistant on be CARB-X introduced I'd highlight leverage The our TX the panel, deadly market carba and on antimicrobial direct-from-blood panel therapy ID our is with associated and could I've which develop opportunity the XXXX. Week opportunities to we previous opportunity core new in infections. is and our The plus panel to gram-negative bacterial first to carba-resistant expanding Allergan pipeline and for TX to Turning a in patient and resistant certain resistant determine at highlighted

the and initial detection detection genes have list These which our of the panel includes We on are gram-positive focused since clinically-important resistance carbapenemase-resistant This on XX called TXResistance the CDC announcing more identification comprehensive and for gene was are a panel, expanded carbapenemase-resistant resistance. antibiotic listed that include Panel. and from gene both threat of pathogens. panel gram-negative on urgent

the feedback a and Panel by infections. available in panel, within for culture bloodstream before rollout will expanded With planning market breakthrough patients direct rate. CE research designation we indicate before program a more life-threatening, life-threatening TXResistance like customers in can device mortality are empirically end current Panel shortened TXResistance granted receive be culture resistant Panel. will are breakthrough the debilitating results only a detected Mark, include diagnosing pathogens diseases can both that gram-positive treated to X hours or United lead by FDA breakthrough actionable expedite on a results real-world and review. the device sepsis and is assessment We're these for of and for use they and Panel the running the care, receive irreversibly technologies blood provide infections the product and to to Feedback positive and in in certain treatment from results accurate drugs TXResistance Europe, infections. an perspective, potential positive launch treatment standard of believe high caused gram-negative All certain which enabling screening will X bloodstream receive and that subsequent to with independent development, encouraged actionable blood that of our for to certain patients' result access blood the TXBacteria are are antibiotic-resistant could of The a their FDA's to or States TXDx the expedite Under other few by as patients time by delighted this has an result. we from three use infections take hours. The or or intended expediting requires analyses just FDA to effective the TXResistance, an that year. the to days From that conditions we diagnosis to believe

this markers honored from appreciate to with agencies, funding and designation CARB-X working towards their and are receive for to FDA the to independent, We We WellcomeTrust. and partnerships first-ever resistance test breakthrough the the bringing productive BARDA look direct-from-blood target. culture forward

which is enrolling the Panel opportunity TXLyme patients XXXX. in we the in pivotal began study pipeline FDA second in The

If XXXX $XXX on by disease through we FDA positioned our to data new and continue will we market. preclinical diagnose pivotal these this Lyme results for a approximately already in trial regulatory offer encouraged are can and panel. secure to tool million data approval, be an to study in carry our the We collecting will

R&D appropriate. addition team on our In sharing will quarter to these John let menus the greater existing who our fourth and With forward that, on review as pipeline to expanding our updates detail. additional and in results our we to for opportunities, look turn me applications John? full-year continues over and financial future work XXXX to Sprague call testing

John Sprague

million to excluding compared X% of TXBacteria and cost revenues XXXX of new $X.X and sales. X with year's revenues, fourth-quarter to to Costs protocols John. and sales months. to Panel over just $X.X last are the $X stock unit, million compared the commencing due quarter were $XX.X of million Research of and fourth-quarter, driven fourth $X July increase of grants in RSU, and the quarter TXCandida launch compared $X.X and within $X.X year's primarily $X.X TXDx million below instrument to an and our low last or million million quarter XXXX a fourth RSUs. due million, compared $X.X last compared fourth of last were range $X.X revenues guidance. sales decreased and expenses, revenue, million to growing year's guidance you, hospital, product loss performance-based revenues level interest million quarter. year's Net depreciation charge the instrument range compensation product XXXX. loss TXDx revenues, last and margins option absence Thank quarter. were X fourth were TXCandida expense income were Product in Operating $XX.X Panel validation in of the $X.X after the derivative Panel of of were million diagnostics sales, year's due total increase non-cash timing million to last in the to ramp stock was up other year's restricted $X.X by were Fourth-quarter a in in and $XX.X include primarily million, to in vesting of of last quarter fourth year's to fourth million and a million

last loss compared was outstanding shares average a million, of Weighted compared share, year's fourth net year's share. $X.XX Our in $XX.X net fourth were to last per quarter. in quarter million million, $XX.X $XX.X loss $XX.X $X.XX to per million

equivalents for and suspected to our we fourth TXCandida quarter half XXXX, the at exceeded the estimated were in instruments half our TXBacteria XX patients in infection. at hospital to XXXX. opportunity sufficient financing and access in achievement cash patient expected $XX.X first the our sources contracts goal. high-risk represents alone and contract of the the they delivered guidance. are cash existing the On as last every XXXX We more December XX tested but sepsis XXXX. cash system at new Our symptoms it believe were quarter and under the results. of The the important showed year XXXX financial call, second million high-end provide is XX, of of half time was if at market of and We patients of than these of of Panels is it the the fourth for XX,XXX XX,XXX least that current was number at second of

$X.X Revenues utilization revenues and and sales. revenues million will discontinue of track with report $X.X meaningful was million reflected to and a base in revenues, $XX.X as performance-based $X.X $XX.X revenue, sales compared Therefore, TXCandida year's $X.X last million drive RSUs. expense over metric be compared million product less and loss increased which $X.X this increased last of Panel research over Cost and in were million to expenses, XXXX. option TXDx difficult last and of instrument for into last TXDx becoming vesting we and become non-cash is excluding and adoption XX% last of margins and, compared $XX.X sales. XXX% compensation of last ultimately, other driven and year year were and million were product by $X.X accurately and million high-risk primarily to Product we the our million our Net $XX.X $X.X TXBacteria metric million. were depreciation of a growing million instrument $XX.X year. were will this However, population, million. primarily increase revenues million loss compared recurring this interest income expand TXCandida revenues million due of and RSUs increasingly and were included to Panel cost and for install Operating Panel year Research million, stock sales, of $XX.X year. $X.X compared to TXCandida will to XXXX a XXXX

with TXBacteria. based a third loss we over research product information forward-looking and grow in Weighted guidance shares to was share per to were XX.X compared per revenue on accounts to average reaffirm loss quarter expect million and net XXX% XX%. call. grows of our each $X.XX and our double share, by XXXX as In $X.XX We [indiscernible] to last XX.X grow XXXX testing $XX.X statements for uncertainty. conference XXXX Our $XX.X to year. subject our go expect as net outstanding are reflect XXXX million last XXXX, compared and outlined million, customer estimates live The to million, year. Overall, following revenue of base revenue we outlook. on

aligns number the the XX million expect to hospital contracts the of instrument In over course quarter, signed million, close revenue XXXX, has $X.X contracts of the instruments, of the seasonality $X.X ramping revenue with our first year. includes United expect States. quarter, first historically X in of double to This outside XXXX. quarter we lower been with with especially which in to roughly the placement XX range the and expected purchasing in we XXXX, TXDx For

As takes John validate and it of instruments. an go typically are to live months testing hospitals instruments testing to new mentioned, average X new X centers any diagnostic as patient to required

typically During distributors the which, this period, $XXX,XXX company a XX% has of nominal per at off instrument revenue, receives United unless hospital, of instruments the the time. national the been And purchased about by occurs instrument. a XX% price in purchase the discount States, list our

$XXX distributors We we Panel. each testing. a International average the a after X,XXX up of range typically up ramp per test TXBacteria expect to TXCandida Panel average X,XXX TXBacteria instrument expect utilization per but test that expect in and to X,XXX capable year, per for prices test TXCandida Panel a in be discount time. per $XXX,XXX receive annual and continuation about running panel. for in a testing the TXDx Therefore, test We from of $XXX estimate of sales revenue average combination instrument TXDx over tests generate to about the XX% is single

the be cash depreciation XXXX RSU We and first operating to million million per million in quarterly breakeven performance-based expect of million that and $XX timing the in $XX.X option by and quarter, $XX.X will impacted be stock non-cash may and $XX during expenses achieve compensation we revenue. including of between vesting. expenses approximately annual to million $X estimate RSU compensation We flow stock Non-cash quarter.

margin expect XX% to XX% roughly be We at gross revenue our to levels. these

McDonough be outstanding you. million exercises. by option may closing shares back Thank average remarks. to And John XX.X of weighted stock Our impacted for

John McDonough

believe summary, year. John. TXBacteria our continue anticipate are and In for was as environment strategy we the the we Thank accelerate on for important building drive have launch operational place change will and We incremental will is contracts in delivered XXXX, TXDx goals to comprehensive momentum, In XXXX and happening opportunities believe in providing company. and Panel product progressing secure new new company we hospital milestones The year the utilization. for a our instrument growth the financial is financials. subsequent for pipeline, landmark planned that our the and also you, as we a pleased on impact

Taken next Thank questions. full for and altogether, in expect to Operator, our TX Biosystems. revenue today's we'll concludes in call two call participation now we interest three you for that each in the your open us your double should to this our this remarks to continued allow That of evening. years. prepared the

Operator

[Operator question is Securities. WBB the coming with Steve Instructions]. our you. Brozak Thank And of line first from

Stephen Brozak

mistakes some Like pretty you sloppiness. replete that's in stock the little I'm and I'd to have And Thank for the ignore, with factual questions to And you've thing you, gentlemen, with but follow-up just that like about, every had about science were been that afterwards. blogger important for wrong think the bearing days I'd and ago, taking just the much few ask one got analyst, A bit errors, is question. summary notes a preparing a obviously, question takeaway. that tomorrow's bat what blogger on out talking like what different. comes a out came did statements off it's But, most this price. the do basic on right what some

John McDonough

Thanks, Okay. appears I'd stock of couple call. the guess, had Thanks comments price. those. Steve. on on have impact pretty on And, you a referred for to. that I have the report to the a know significant I being Definitely

is curious a look everyone are the impeding report which the share do both is in basically to would lives. for timing about, who in shortly that's status isn't price, after basically make says short all the a darn on anyone a TX end short caused definitely on at money patients' disclaimer at breakthrough a first a in way the in it but the position reads certainly the should position. of for people someone's stock. the of what TXBacteria out It I'd hard some good is their is that Panel, course, save The it report, say, to probably the it, had it's clients that can that And runup that news point, which, come that that that good pretty see trying blogger product and that

per that we over detect hours and that of X culture, X.X days, that the to that them could that blood one in only guess, speaking, product results, these infections types equivalent one is can itself and will at would short anybody I that's have a opinion. has with shot is result people to cultures, product one that sepsis their there's whole although a of statements versus of a should would don't common author five I of can that culture compared key the One blood without that for them market that do and is just XX too somehow our with never And didn't in of odd XX% that time of that XX% product assure you they subtle not probably product spend certainly detect up of is XX% any Abbott of detect product understand as between data X that in in culture on and diseases. these then show of seems mentioned post ml. got for up with they infections results people, but, inaccuracies, FDA it's TX have report some want to deadly directly reader report product CFU perhaps it X but of omission that doesn't of to make all mixed is institution blood It lifetime in the a from is combines lot factual to is that the to reports, and the facts, I succeeding they compared the report TX in X provide mean in the be and being that a it, and to the XX% well, market. Generally those close of can first the what's I'll as Roche a versus the X few lot compared want points. blood a from blood, to whole because approval failed, or some couldn't

of do States, never the that In cleared tried opportunity, again, that to say fact, of after denied, because therefore, and, nothing to the the never can the that clearance go technologies to they fact for comparisons the first but companies one I in and that reconfirm say FDA market, sure, those market size in would get really think case we for difficult we It's but offered United FDA from in will. product, they and this flopped place. sure Roche pulled were the size it Abbott,

position with different we're in think clearance. a FDA I very

I point Lives everybody of identification. changing impact of a other completely clinical on being we Additionally, the report species wrong. make on say decisions. species tries XX% by wrong. probably it are based our author because strength the FDA presentation response The be of I journal, very difference has clinical of one that the of had Council report. maybe course, identification about just status of doesn't are guess, than heard course, the the the different And, think Advisory strength of that which lastly, can have recent just made There's would in be decisions at The the of confirms and President's And, lives. is our validation That's breakthrough all customers. because tier just to Lowery can we granted a publication. patients' on And was Tom a recent A us JAMA clinical of that. JAMA matter. couple saved. that's would we points. the to

where that, examples of out but you he his is best availability provides a saved significant a to of of the comment and And very have of Ford being our company patients. blood that missed, about read the There's infection from designation. guideline, big patient's also because point culture receive where product that at for Health a advantages not breakthrough a physician breakthrough if offer Memorial a you I'd breakthrough deal. Henry is has a interest a when of would life. We It's designation just believes have And diagnostic infection XX% designation convinced TXBacteria rare Panel. case use forever FDA identified in rate. the XX% physician to type the we an recent because TX There's We will System. this mortality

then, probably FDA believe is say, can and the revenue revenue just our I'll a to of in say, that not But I in would guidance Sprague we going also the XX% grow that so, lives lastly, John recurring. And thinks patients. provided our make the I technology difference downplays report big research XXXX. research that's just believe

okay on front. So, seems that like doing we're

don't going our Always but in know of just do TX to things don't happen. there's a come here inaccuracies where say from. reports their are. drive I bunch these lives – We're to what bringing technology to going don't disappointing to I forward. moving those price to it. what reflect of patients' going keep know we going the is I know at motivations continue there. that rest our We're that So, objective that. and is the impact to marketplace. control. do as into products we share We the market. control we believe this That's We're to to

Stephen Brozak

answer very Thank succinct much on that. you. I appreciate the And again,

what say internal can I'd of that – frankly, through Going of that is specifics placement, back follow-up please. and you terms else. that? that we your the like hospitals of and than with to approach Because that it's you critical you how one your the to can your explain monitor things And go contracts, after anything more how path in the

John McDonough

bet. Yeah, you

be there where live. accounts back us that a beginning to hospital for placement that to before know adopted. the the So, the X the because year is into we a important can as most of technology it us metric instrument the can course is an year, we and X going month and this over pointed go process And gets the XXXX institution shows adopting of out, is

back it we've quarter, second all in doubled in took of the the the TXBacteria, almost number middle placements. the the year with John of rate of And been And XX growth so, XXXX. result that as as in XX through half placement delighted in the the cleared placement the versus and half of the at. FDA basically running the got rate and we've instrument We on year. are mentioned, go we see of about year to But going we're the we it's revenue

really think are hospital. our that's can economics move that the This of cycle hospital that people the there, a a just almost of hospital predicted value I make. and sales impact indication out it decision quickly, their XX the XX-day on of is big to identification that patients technology interest, have real game it pleasantly – we that. a changing that have lot point surprised, the hospital to --and most would adoption – a And and for the see that to and shows were shocked, we rapid big are if for of a not technology seeing, I out there their ones, them educated might that and nobody species

Stephen Brozak

me don't your on you systems, If critical that's indulging mind that what tell a the us that's because you can for second, hospital something about obviously to growth?

John McDonough

are use of larger the some systems. at seeing We

in involved achieving want major in multiple XXXX. will play are our us to We you sales think for that the that significant goals with of we role our all see ones a with cycles and

Stephen Brozak

Okay.

on look hitting could out doubles, would you – going have or at of hospital and growth? that, versus singles system based there analyzing in multiples you that So,

John McDonough

about and see of building Absolutely. going lives That's the being coming the these to to and the going point. in in interest live our and to can tipping market. accounts the getting you definitely and is the patient that impact the it drive and point getting more momentum opinion, happen. And saved the In are institution more stories

Stephen Brozak

there this out now were go your what will and So, pushing it? actual to the for I these pathogens. a at care and of be words, by way discover and Is point you're ability there of your looking good to in designation a go is tipping case, out use particular where standard that if your challenged

John McDonough

I think being And Council great at a to and invited it. think of I that. that's certainly way of indication Advisory is big a presentation the looking the President's

that from are experts is As in indication The leaders, the we have. FDA. differentiator impact can out are the seeing there the the the that breakthrough device biggest

Stephen Brozak

use and or to lot only And then share? can case, research will they specific, are or just what anything to your the financial research that. and only. on you use is approach actually a a got particular with us have They'll anything if you've of I'd use note, else. a like tell There that but on Can you diagnostics that that are we But Quest companies that designation, model in that. like go for that PACCARB, for metric just one different about cover always

John McDonough

that can the TXResistance available the about be to companies. and, clearance. breakthrough and course, share a could accelerate help clearer provide that only designation full That's objective the can getting US. research. be be process can used product publications where of having the to end product us we in But will product for And, and pharmaceutical be milestone that calendar should Panel, seize available can course, before what we're to help only US. the the can generating And smoother give get in used hopefully, research that of the year. excited used that use our be is for outside use clinical of by able Well, It be really and to would that will of of Ultimately, with FDA research release market. the on Mark authorization path. studies achieve CE that use track It and at creating this be the the time

Stephen Brozak

Okay. Last question.

investigative the that to bookended Going in be of much could by true sepsis XX% to came this the his you were chair, by by basically do queue. you took for saying the discussion answering in that VP place was statements questions. estimation, bioMérieux, that the diagnostics she the into thank and for PACCARB direct again look TX. these up entire panel of, What sepsis. said the what made and back about that And hop the an pretty thought I'll and future? picked the your out PACCARB along in was approach something novel a that listening he of And and were for at And lines thoughts

John McDonough

And the antibiotics. of is because resistance play to out dialogue the antibiotics why national of won't excited big market. level in superbug. of XX% driving to is reason cause for the XX% the problem The resistance Well, part time, of overuse at the are of work. a primarily of we the is a be

for that for things think, story people we the identification, underappreciated also And on of Basically, place. the species about understand the that – good in can that's, the I that drugs. sepsis. of TX lead to our for that hospitals, and that TX the many with test of I think right good good but de-escalation the – detecting detecting allow, pathogens rapid patients, get is is rapid cases, we're a negative One patients drug, results what provide resistance can it's in eliminating provide drugs we first de-escalation results for is also reducing

Sometimes people get confused. We're not sepsis. detecting

on We the faster. drug are and identifying getting patients these right sepsis by much preventing infections

these using opportunities thought So, that presentation. look Lowery opportunity the there to We Dr. support. forward center did to a of conversation. front a of products put we're we with Tom delighted And was lot great pursue the in and continuing job. national our the

Stephen Brozak

Well, taking Great. these time the again to questions. answer for thanks

John McDonough

Thanks, You Steve. bet.

Operator

go of the Massaro ahead with question line Mark with Please The question. your Canaccord is next from Genuity.

Max Masucci

for Max is This Mark. on Hi.

are of So, you were bacteria the versus just agreement? customers me Can QX capital contracts understand in help what revenues will live? expected why to given rental more just decline QX better percentage be XX sequentially that

John McDonough

will John question. let answer that I

John Sprague

fourth quarter. Six the capital sales Yeah. in

John McDonough

sequentially relative fewer in capital an to QX. decline sales expectation be would potential QX The of because of

be decreasing We expect QX revenues to from reagent QX. to

Max Masucci

guide, throughout Okay, of you understand the around and breakdown. the appreciate the we on And your the full-year and split revenues I can think product that's assumptions help QX helpful. in research acceleration product revenues How in us just the should year? color segment quarter-over-quarter about

John Sprague

product you with to the million first So, $X.X revenues quarter, $X.X are million. million guiding and $X.X million, between at we look being $X.X to if

So, $XXX,XXX the that at $XXX,XXX quarter. will research to be first in

Max Masucci

understand guess, you the timing just And hopefully, better market? an can can to, the hit steps with just version next help helpful. TXResistance I FDA-approved us Okay. FDA the expect and Panel? roughly when regarding the That's we

John McDonough

certainly that of expect And say what is, clear that going in based trial status back in timing. be clearer XXXX. we'll to accelerating And have to decorative. Max. all discussions don't clearance, of XXXX. the We're FDA today We But wouldn't be we a don't we would with later help in the of once answer design path understand can it around XXXX. We to is before that. happen we expect it would happen on that enough know even have once breakthrough discussions. in question, we report more know and more to able in the path we're We that definitely have The don't terms we a what

Max Masucci

Great. one then, And just if more I can.

do Should in more have it then? we And to to or FDA Regarding TXLyme, still going? is for more early looking XXXX of expect by spring/summer enrollment how find you XXXX wait end Lyme – you patients? like the do is the an submission

John McDonough

Yeah.

to of here whether It no a the we have enrollment. We of be unclear be And filing spring/summer need and complete season end by XXXX. able order require everything to to enrollment do to the get do to kind in we'll pick does it's on up. that update

we know of So, it's possible, is but just sort until the enrollment recommenced. don't

Max Masucci

That does Thanks. guys. for right. All it me,

John McDonough

Max. you, Thank

Operator

Patrick Sachs. of with proceed Goldman line the from comes Please question. question Donnelly your next with The

Patrick Donnelly

of the there? in on hand? expectations new the key And Maybe you approach? back go-to-market on think Great. strategy all What changes market guys. the us at help alter approach just are can with just drove change Thanks, what your the the new the the for for TXBacteria, then, decision end to

John McDonough

question, Great Patrick. Yes.

medical we in building roll new affairs the last in think a to a the sales now of product approach, process. That the and get to liaison had big the the that call, terms they sales cycle. out customers US, go When through they're patients the up what medical whole one change is the team six is the and a this to approach sales person during patients in to as live And in when they you people discussed team. are identifying yard. making in testing and they're So, science difference in to the that that when point cycle going biggest

difference getting getting on haven't is The put made other that We've that push speaking bigger a to. institutions accounts. more a into much we area been we've into

is alone, these accounts In got more the than of And had second understanding fact, in really XXXX. cycles by that we can driven in a we introduced quick. of that January introduced to be half sales the entire lot been

So, moving we as potential as and who two getting team want fast in possible to for the be the points. in sepsis to are front decision-makers, people Those key are committees whether of are sales they identify front committees, stewardship and these quickly. on of

to out changes, and to effect expect at do I and like later far that guidance. And reflected see implement think anything guidance these come early too into we'll what a the of today. readdress we But back changes of that our as start date. is we perhaps these

Patrick Donnelly

on And helpful. into for then, time that's new for what's product, front? can appreciate you just customers TXBacteria? take but trends Okay, the talk guidance early ramp XXXX that on to also, pull-through, validate certainly and utilization just baked then about And

John McDonough

Yeah.

So, go through of as But, purchased half we now. full first the year expected. the quarter in you is early build just year. live the first a ramp boy, the the that going data are is too The because expect and utilization then accounts the second in as early

we're on So, track.

are as be reagent but all ramped to of be year XX% will we XX% these TXBacteria, revenue driven as more of second the compared ultimately, have that volumes growing. TXBacteria and the TXCandida. customers testing And, expect will up somewhere the We that our change half of utilized in the still to expect by and between would in TXCandida first the half likely than year,

Patrick Donnelly

Okay. big data. driving And customer are just a with along obviously, testimonials, one, last keys to maybe mouth then, word of adoption

You already have shown. guys

about talk of hearing think to this you like customers? really new you're take you just long really will outside the gain Anything it out the can kind to again, inflection How market testimonials there? traction of, front? help a you just guys for can cause that eyes of do getting on an product what So, in in do along that to customer

John McDonough

that this it's and product customers two-pronged making working approach. hands about Yeah. We a all the works in sure see believe of it's really institutions. can kind It's of

it. are testimonials customers of big a part So,

of be is will which next conference ASM significant in on conference ECCMID Our at June, here is I mentioned And and which in publications. part United then, the the other call. studies clinical be Europe, it at States. in We'll the the

the are We to back FDA covering a publication because XXXX. large, will expect they then, to them will And and be it a the our number run investigators running of study, a should of that to publication we even to institutions see was them XX-center what really large from on studies the to the label. very are label pivotal to investigators, guide But would hopeful as will Those see one-off the studies infections a deeper work the going number in from and That clinical we as repetition FDA expect be can we by to those at what's help several go be that of and with and different expect XXXX. and in a are important. really terms see trial on steady XXXX and important able what speak to being rollout important situations very, on go of the we years. going that be next through than for

Patrick Donnelly

Appreciate it, guys.

John McDonough

Patrick. Thanks, You bet.

Operator

next The question question. Janney Please from line with is Knight proceed with Montgomery. your the Paul of

Paul Knight

on sales months' got experience? six you to Hi, you've John. placement that terms view, in turnaround now time, based in time Can your of changing bacteria? is And panel on review that of the

John McDonough

Yes.

of starting to is do samples the of that months. to studies mini and little still being and will they X help experiences of in done all Most because using and XX like validate we've other clinical we sharing closes talking third patients. which sales quarter, one, of is job X getting do providing which test it that they before FDA as this TXBacteria just months. X to to good about and still X end to job. But validation I test is think in Labs validate fourth a diagnostic clearance, our range, X one tail they because numbers why calls deem whatever the areas able they And periods which to really talk them they this we to months the into patients. is the second companies, to appropriate. good have a really and experiences, But towards good that required testing it really think by come the We in has live the happened done XXXX a approach quarter, is were go the X shorten having are I in sharing and X X some job nominal month it of the following are why truly to and customer end on in happened month accounts we still now range. our first at the to have X really quarter kind

Paul Knight

field, threes What sales one, still two, do convinced administrators is? the makes your you needing are force practice? doc what the the giving or you utility are as on think And that think Is is you it in clinical clinics, it do view it the hospital as resistant? you commentary or

John McDonough

they patient was about products person. director decide are in drugs to because longer aren't they regard. involved one actually were director the will the That give every antimicrobial sepsis. in sometimes what the that actively person guess means What not know stewardship patients convincing spoke is was a number suspected and I to to lab that's the first they quickly. know together. changed what's can day, where It's the is our completely to each you do informed on got what's this can cycle see to little decision. meeting shifted than the involved the one to microbiology When say and on groups your it XX% a specificity, every their him, therapy. of he it's phone up day, discussion of specificity, clinical experience I it's specificity installation with testing they're to patients have gets XXX question he His with heard in into they rare trying those committee. And working totally. based course, because, he's I and drugs them test I of And they group director, on where XX% and the goes the the lab if would where middle results really that need TX introduce bring have. is, lab hopefully, next XX this less specificity; that and live the days discussion your change will that But And that managing personally what and the that sales later, one you empiric be the adopting and, I oftentimes are that in in case, lab all that the I than was phone, share impact bit and, They less each directors the – are again, going the in to going case, had the hospital they're when clinicians. and a in QX. and

in unfolded of that All December. month of the

lab that are When hit not, who at they you when run ultimately, the ones level, they just So, quickly. involved be need they the director that to tests are convinced who's ultimately, they their move bit little can would of and, out the people. where one cost budget. of But the say the typically to longer comes I take test things that's number area a sometimes convince because,

Paul Knight

Thanks, John. Okay.

John McDonough

bet. You Paul. Thanks,

Operator

proceed your with of from question Please Cantor the Fitzgerald. comes with Jordan Abrams line Next question.

Jordan Abrams

sort for considering meaningfully to adding color you you to Thanks. accounts? the And planning new adding what so, reps, new reps the and curve to reps how add ramp sales strategy. in if learning any is Appreciate customer the guys. in Hi, Are of are steep contribute on XXXX?

John McDonough

Yes.

reassess pause as beyond go we'll kind go in whether of beyond or of as and XX And to they plans We come XXXX. onboard. any first XX have not don't can after fast that. out we rep we'd So, typically half it calls the midyear there making get the a days

We training have a pretty rigorous schedule.

to process. they in go more close X them on likely up got learning you And timeframe reps. before closing rep that, their months of educational X put actually to a see them hire that's them. but experience because terms It's deep you after with sales have I where of you're probably We typically business, that goes a the to first X of accounts X other of sales range. We've for a quicker, realistic piece you've more top make X-month would you curve when had more it's examples might the altogether, say, cycle that range on when in X calls some month

Jordan Abrams

getting hospitals outside then, customers in a accounts? that the placing to speak can And mix of nature or are signing the the department And ED? possible Great. department outside is versus plus you department traction emergency you're emergency first provide how second, are winning, emergency of emergency Thanks. the to a department? So, TXDx you it only a instrument are

John McDonough

are as all In, as cases, areas itself yeah, but broad on of of And they presenting there that to But, discussion. of all will expected patient a and is with accounts being be live hospital and the going department XX% and unit purpose emergency consistent typically department, is in more testing are in Yeah. And a care and certain Over XX% to straight this different. every is step of John some something there others. because microbiology go of a for and we called TXBacteria And of the the intensive the revenue criteria certainly sorts in live, hospital all ramp first. segment And are there's call used are consistent other they X in doing it certain XX% the emergency be antibiotics put the instrument terms the a place. case. going department. now X something provided virtually, – meets the package hospitals it tests. patient will a guidance call Others well, we've the virtually department. and hospital lab, or the that the objective see on the on automatically sepsis them the are impact they the alert or a package. what system reimbursement the that sepsis how a a of for do first bundle, the If cases spectrum going in that's has taking begin of is they in the sepsis of that. I'll package And and and grow step are that we about and to it the emergency to will strong population benefits earlier. talked sepsis a test patients, try objective in emergency with part that's and go it want

Jordan Abrams

taking questions. for Thanks Okay. the

John McDonough

bet. You

Operator

with with of proceed is Soumit question Please from next JonesTrading. the The your line questions. Roy

Soumit Roy

for Thanks question. Hi. taking the

little a are culture you color in controls, that's on there? the see, post What get April. to going better any clinical benefit? are wanted blood data versus And setting Just data going world out to showing to test real coming approval, economic see we or

John McDonough

Yes.

experts There So, of also at on out and symposium them And absolutely, there number then, institutions. who of different to be will their of expect will will presentations use a publications ECCMID you of coming TXBacteria. poster of should the most presentations TXBacteria the clinical to a of series be conference, a clinical other speak product. see

research TXBacteria use users product. Some of only the were

of We go as those XXXX. expect through to see we more

Soumit Roy

back investors whereas the revenue more, or Do – back? What's to think in really or adoption, believing Street than benefit see they that product holding showing the holding Wall to really its see that's want you poster a be to key the economic the want there? growth, rather real-world the clinical approval they

John McDonough

on of what's to going because I'm back. that don't question kind exactly I know investors holding punt

are. better we have it do a what to I differentiators our job clear think making

confused maybe from it. that that get I direct may don't they and and part be blood think people understand sometimes of we're

begins the think tipping the and it bottom and clear can in can very as marketplace these and driving we play. I towards that Yeah, objective, benefit. market and think adoption onboard ultimately, for a drive market testing, there's line driving placements instrument one that a then as investors factors understand growth think and I And where is profitability. our we'll are that we all patients through I do point number it of going is impact having hospital improvement. so and, first are sometimes Hopefully, show economics. is that, And differentiators revenue some line use for with investors top drive and to too of in see the see they come we more

Soumit Roy

Just TXLyme Thank they testing one using and you point do to more the are to feel you I see test. only using to we and TX that clarity and And the culture last better TX when would data at what the when a as more as Panel physicians, right comfortable talk you. on little think And a filing now, they color, of XXXX? question we get is, suppose the blood can the panel? second get can for the both

John McDonough

patients. all. Yeah, of the and mid-term, best needed. kind interest That's believe, economically answer. the Based the panels needed of have we on culture that's short-term at two-part a stopped market, don't on We the be in blood in or will not not not current the

pretty another I there four of to the run And, they later, equivalent hours comes then XX most test remarkable is TX own further time sets four first blood we poor are One as And that one and However, all it's typically, time that's just in which advantage third fourth never come resolve. one first culture mentioned, right for do culture right, place. hours the later. sets, the blood result, because the but delaying sets XX is almost the the in away, its mind sensitivity might of have that two course, of blood patients. culture of of

culture though, likely sets, side. decline. positive TX blood number So, are And the to two run is of when the side by

and set. get a TX that culture may fourth third you positive, If run not you blood

the you CARB-X blood XX, and how come first have run the not much through time, You or being two market that product intention a may a our culture TXBacteria resistance of that to market. at developed product probably much bigger run and but the much, to still will that, identified that and may Panel. as detect fourth the third TXCandida with the you've work impact it's infection to the run markers on and is will pathogens beginning, bring expansion is Over XX more through sets our because or the

impact of blood a they case never that, couple will years be from have But, for the a broader to on required run, But away a short it case hospital that, about we're that ever to one in that's ever culture. ultimately, about in to nor scope the sure. bigger the Now, talk be and not that. we is almost and actually hospital talk a

update terms in really In for just like. to might progresses. But we clinical later to year, difficult season progress. of that we're and further sure, to be on even to have provide report today TXLyme, be a able study do so much able And, we'll hopefully, that what where Lyme this timeline look to not see

Soumit Roy

Thank you on congrats so the much. And execution.

John McDonough

you. Thank

Operator

with The Chen next is from of proceed Please Yi your question. Wainwright. question the line with HC

Edward Marks

Hi. This is Edward on for Yi.

a Just few questions.

So, XXXX? you revenue in be the does include in Mark from TXResistance TXResistance guidance of candidate? TXBacteria then, before the provided, terms you're TXResistance What the if end And TXCandida the the this follow-up. and would the any price to anticipating potential of a CE and that compared Europe then

John McDonough

we So, Panel. a TXResistance the have not for established price

have you $XXX but trying pricing that's that's I you to to officially similar we start, in good TXBacteria to if not our think we assumed range, the were if model, to a probably And, do price that time have from guidance have and no, we any before include and product do that does do work priced not TXResistance to it. we XXXX. in revenue place

Edward Marks

could at compared provide produce that timeframe of TXResistance. then, that the And any in competition results that similar I you. you anything really horizon anticipate just general, the thank on just or in if see Okay, detection looking to and space was wondering gene sort

John McDonough

We do not.

seen And not get others would clinical suggest XX not that data of range. companies little per ml a aware on. have an couple this going any We working talk X of trial got about be We We're that CFU into is getting know challenges can know the to couple, difficult think, they've FDA has it on are here. least if these things. a that's successful, and years of been. they at always know three away. successful. how We we There We they're assuming

closely, watch but for anytime soon. That's don't we really something see coming we So, anything sure.

Edward Marks

Thank a numbers the that's And provided XXXX, final if going around you could just Excellent. or for TXDx, clarity you. primarily Panel wondering those to driven provide if to are you be where going come on the a guidance from? little more that then, question on just TXBacteria

John McDonough

John, do that you one? want to take

John Sprague

Sure. latter range exiting start to the bacteria TXDx and really candida, the and XX% towards cartridge sales. the sales will bacteria is XX/XX, is About they of be and of in XX/XX the increase and XX% although exceed year, part candida more And year. are

Edward Marks

both very All right. appreciate the much. Thanks time. I

John McDonough

bet. You Thank you.

Operator

you. Thank

proceed from Souda is with Puneet Our question final question. Leerink. with Please your

Puneet Souda

this. guidelines What than Help the can do Thanks. Hi, still How what are – the to John. adoption I of wanted I sense get just be a thinking apologies product understand. need you just into broadly guidelines and each to customer or drive rather are that if to in missed attempting about overall to you and us purchase? product? you product convince

John McDonough

sepsis, is we I have of or do my less are which the the experienced with and of than work of hospital. field infection in reason last had working in that space lot is CDC that other the something infections diagnostics, a cases, on cancer they The by And different types for the have guidelines like others. in Guidelines company. of field and the going impact in this a

studies that do have get the And the shows But clinical in to size mind to and that they studies have into helpful and guidelines work. getting all fits those validation quite in beyond. to is clinical have those so, for into and XXXX the data we have and progress be our in guidelines planned and that and we key doesn't can will one the certainly

Puneet Souda

on Okay. And the the been from overall customers on then, what's menu, menu on feedback TXBacteria?

John McDonough

been our emergency speaking, say infections It's Generally Again, over will within the hospital. five infections in positive. panel hospital. different. the cover XX% I very would slightly of XX% it can XX% the infection a be Again, of are different species on by rates department, to

they Sometimes in though, time, and see rates that statistically, oftentimes, XX% might has hospital, might a different numbers of as same you'll you'll not higher then, go the that lower. infection value rates into well. And see But, infection the are panel. the be those

pathogens an it's you for positive institution. cover are of most a go recognized that's reception into ones the generally escape been speaking, and panel. generally So, problematic when which We XX% the the

limitation, see but it part of So, discussion. be a sometimes can as a that we don't a

Puneet Souda

that get then, growth and last sorry, And, expectation there. US you expect now on if to overall the one wanted of versus Bacteria a split – EU up just And the for covered what's Panel and your sense Okay. Resistance what's just in with already. you coming

John McDonough

No, we didn't.

comparable We both in where as placed dominated is with through those an a most little revenue go a see XXXX. dynamic being where selling are US often the contracts of expect of distributor. rentals we different. most those are instruments we're reagent businesses bit The to reagent Europe through because The instrument growth market in

is that. revenue there some with So, associated

And you reverse instrument more growth year. sales So, the slightly see reagent. from US. we comparable Europe, both the expect in see coming areas the in for rates But lower to

Puneet Souda

thank Okay, you.

Operator

session. of We've reached you. Thank question-and-answer the the end

to McDonough turn I'll the closing John now Now, remarks. for call over

John McDonough

much Well, thank the to listening for very you call. all

about for look results reporting impact TXBacteria excited about We data. the on and you seeing clinical very more adoption forward early excited accounts We're going are and with listening the call and are And live We're about all excited next XXXX. in we in TXCandida. thank development quarterly we're this rates. with back the that afternoon. to the the We more

Operator

conference. concludes This today's

your disconnect you may this your Thank for lines at time. participation. You

T2 Biosystems (TTOO) 8 Mar 192018 Q4 Earnings call transcript