TTOO - Earnings call transcript Q1 2019

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Operator

Welcome to the T2 Biosystems First Quarter 2019 Results Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]. I would now like to turn the conference over to Zack Kubow of W2O Group. ahead. go Please

Zack Kubow

and for Operator, results everyone. for Thanks call. Thank TX good Biosystems us the financial first joining you, afternoon, quarter conference XXXX

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

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

John McDonough

was Panel. quarter, live testing for our progress, us and first the with results, and in quarter XXXX. Thank the you, afternoon, went thank a the as patients States we as outlook Zach. Good milestone the TXBacteria discuss are customers and QX joining first United everyone, following you of

earlier detection We are could have infections of been patients life-threatening. benefiting that seeing from

by new the This guidance. In quickly by exceeded patients have utilizing we the focus TXBacteria which this and the a delivered motivated with full in the early at again targeting employ pleased that the and efforts the And will tested contracts more and panel these to describe funnel, sales Panel navigate phase. being to QX, validation new was first that start-up our moments. that customers of with the our our gone customers. method, attracting potential by saw with more volume cycle the We beginning will driven demonstrated to we period as efficiently a faster progress This is live. of quarter in and continued working few followed are we revenue and these customers hospitals on in sales are sales at new many TXBacteria part activity see I team adopt marketing hospitals

exceeding new initiatives customers instrument of late TXCandida $X.X the that Panel also suspected infectious the and month revenue volume to of of to first business, during TXCandida TXDx remarks, testing level our product financial XXXX financial detailed the guidance validation quarter. in we our first began of more quarter, expectations. commercial our start-up metrics million, my Sprague, results of a quarter. utilization results the of XX% X provide testing financial up but to to patients $X.X to our disease other We growth management pipeline for begin and their so diseases. continued the review the and revenues results Total TXBacteria for advance provide and phase Panel review which from ahead $X.X commercial CFO, Product are and potential year-over-year. completed was Panel X second million. of reflects TXBacteria will high In guidance, in $X.X activities This and with a utility in bloodstream commercial for our expectations update grow the and the the expand After our million, Panel on sepsis the of were quarter an related million I including have will delivering our Lyme quarter. John will detail, and the quarter, we for continued infections, our adoption drive the

more in second ramp revenue were and online after As volume half come expect second during of contracts Capital XXXX customers or and that entered sales recurring the Panel we quarter, to the TXBacteria up. reagent therefore in model stable customers new upfront customer the as on minimal revenue stronger to select TX sales. recurring is Biosystems, margins for rental but minimal QX continued many upfront which cost

new We of customer program the will arrangements continue the United constitute expect rental going the reagent in majority States forward. to that

and XXXX contracts TXCandida metric key instrument our contracts other Panel future secured against the In new quarter, of of secured to which XX testing recurring and placement, first we The typical ahead which X TXBacteria utilization. contracts, XX new ongoing of guidance QX headwind. of hospital is adoption the a is for represents TXDx from in number our driver the revenue business for

XX, contracted had March instruments placed growth to we As track first and instrument new keeps goals performance new be of quarter on revenue us achieve revenue in for to or our contracts. Overall, worldwide. XXXX the XXXX, placed contract XX and our

systems to execute Turning field to pipeline TXBacteria Panel, new work TXBacteria raise against the we Panel and beginning awareness commercial patients and on live possible. new our an patients. expand as customer patients hospitals we as of the on to of see testing the see soon get positive launch, to as several ultimately TXBacteria indicators begin of the testing as update continue to we in go and importantly, impact Most begin are

and was emergency on were hours turned later. sent for an TX infection was but patient, came and they at department patient A the a culture a XX run patient diagnostics blood E. confirmed home at as other back negative. symptoms example, few For brought hospital, The A with hours signs the one infection. of positive infection the treated. TX properly coli and in back immediately the entered

the to which after positive X the antibiotics resistant to economics they of changed days was has this for part test. Patient wins vancomycin. were therapy us in during where ran allowed patient antibiotic as secure continue the including and hospital with was our a X patient TXBacteria stories changed QX in like was hours customer TXBacteria cancer of Another the for patients XX line the some cycle first X new sales launch. in months with and day with hospitals, experience benefit XX to in to

our efforts have similar in similar rapid management projected size improving successful were a outreach and attract hospital also and on adoption strong to on to more sepsis on targeting, related pathway. focused which This focused more therefore and with patient We a broadening institutions in order our volume. profile, stewardship likely with care hospitals original patient are builds

were to with In addition, able pleased month a we had traditional was X to that close that cycle. sales more XX our contracts team customers

XXXX just by the accounts the to report of mentioned, phase, second are half the the validation signed I the X commercial X we that, start-up testing first TXBacteria during Panel first government. following in As to which quarter, is excited the required new began of and month

testing uncommon We laboratory slightly period X at place expectation. due hospitals is the patients we stay as validation to ahead are of are going this extend diagnostic seeing live in we in range that pleased or with XX not to even it is of periods of to other put our that in months The for have volume to products. methods this line

to Hospitals in the utilizing customers early our are with at team feedback been group expectation. has suspected of to patients this expand through group our gain of patients the are test. starting liaison. with with been medical protocol experience In The these transition plans aligned of sepsis the their our team collecting the to hospitals broad that with specific as has of they protocols been science a testing We of live utilization has positive. from patients testing early supporting field general,

On Panel of their with the of from the TXDirect campaigns data marketing one the is activities have benefits clinical support the of TXBacteria of platform. launch awareness along the expand to new institution. to key and the XXXX present components we our customers momentum the publish Panel for front, and enabling strategy TXBacteria Diagnostics Highlighting data of and planned several

a We continue result TXBacteria clinical the be expect to to pivotal medical soon. published the peer-reviewed Panel FDA in of trial journal

and is a journal currently for fact, scheduled publication. accepted by In top tier it is

the has publication. lifted, been expect we announce embargo the to As soon as

leaders. physicians In about XXX the April, technology. many a this One publication have of in TXBacteria clinical Diseases, a accepted attended of providers, symposium integrated XXX X remarkable, we a the Congress and or stated panel European a trials, Infectious and in our sense panels being that people of ECCMID, quotes share data want data exceptional, at and results. in healthcare journal included and how TXCandida I TXBacteria to key short by of speakers to For hosted by demonstrated our opinion symposium and The TXCandida Clinical key estimated is and couple give you to peer-reviewed Amsterdam. clinical TXBacteria the of important an validator an X speaker Microbiology is an highlighting of consistent

blood Another speaker the TX TX treat you a and result culture, also discrepant with if on advised, result. get

these culture, and of interference patients one tests. of underscored more TX. like With resulting drugs of by these detected comments presentation, in their physicians TX beauties There blood full no the antimicrobial was

recent clinicians clinical In X Diagnostics there TXDirect on data scientific In getting highlighting TXCandida resistant bacteria and the and and infections a addition, the are several with for rapid more how were Candida, therapy demonstrating panels. most reviewed, case pathogens. users from studies were patients leading TXBacteria total, presentations

our Our trade heavy and show interest was booth high. products traffic was in

a customer and several set. US Diagnostics and multiple into had also March February in providing emerging strong TXBacteria at presence meetings highlight We Panel ECCMID, European data to TXDirect opportunities our and leading

Looking to Society customers in-booth and engage Microbe TXBacteria Microbiology, reception other in panels. that initiatives live expected at ASM customer and VIP TXCandida June. presentations include for evening Meeting and will have to presentation, enable the to the with us is and events presence This forward, a American marketing we highlight and physician or Annual expect robust

our new our opportunity technology. market have we expand leverage product to several core and our to pipeline, Turning opportunities

research direct Panel, the receive making and by identification Designation mortality are a Panel Breakthrough gram-negative days, We X independent. affected as both Panel can several our from in end this to continue results the TXResistance to to from year. on versus high infections use rate. blood Panel gram-positive are for Europe will hours in with discussed life advancing lead to the from on only be year-end within Device TXResistance States United threatening, remain culture blood and in enabling of TXResistance resistant and and the development XX call, the the sepsis As a product the FDA result our pathogen. a before genes and activities of track available with Mark, launch CE and available X market anticipate which other our to tests, Similar received the TXResistance we detection The

providing a resistance panel, underscores providing the customers enables for need a marker TXResistance Results separate method. fact, been to the stone Resistance information identification blood testing positive data launched the and panel a results subset dependent new this marker have from than use panel. research clinical presented the and a blood customer days value our In showing ECCMID hospitals for stepping resistance from at to enthusiasm the we we're as also and pathogen of as culture Diagnostics direct from completing earlier called resistance blood only have were that this without panel culture, enthusiastically one this TXDirect TXCarba Panel, X detection. This results X Panel for product

panels partnership gram-positive TXResistance program we to our and resistant CARB-X include addition additional including markers. to to the bacterial ESBL markers In our and also Panel, to species expand continued resistant advance

and infections, sites of of ahead the CARB-X appreciate and TXLyme a developed agency. program the investigated FDA that study Panel, we the study. is detection with collaboration XXXX. funding in Outside trial CARB-X are The patients in season being are the March enrolling began of We and started its currently in in stream blood our XXXX in pivotal schedule which productive our

we an diagnose Assuming it in approximately offer to regulatory million can to Lyme and new expect we $XXX that is be secure a tool successful market. disease to approval, positioned

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

John Sprague

you, Thank John.

and Research to ramp revenues guidance. Product and last their year's million and Operating First year's revenues protocols. diagnostic total to month in million Panel above quarter. high $X.X XX% and quarter TXCandida to of to $XX.X in was new last Panel year's $XXX,XXX sales million million include sales. to $XX.X grant sales product $XX revenue, Panel quarter million, guidance. were compared margins million income TXCandida to first year's Costs midpoint as compared were due the first compared RSUs. our first $X.X the of first contribution expense were the were last quarter. July a in product compensation of increased growing continued million $X of at million and $X.X quarter other higher first and were completed of loss million to and to after launch $X.X compared stock of primarily interest validation $X.X quarter non-cash and million, than TXDx year's quarter. million expenses instrument TXDx by primarily compared expenses, hospitals last of $X.X $X.X a million driven XXXX were compared of vesting excluding XX% quarter TXBacteria were last year's and performance-based quarter cost Net revenues the end in costs $XX.X last year's million $X Total revenues revenues, of instrument X to first in X last depreciation in loss XXXX and first

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

estimates to XXXX. XXXX. Our are on at as forward-looking X, and March half following subject and cash were are cash believe of XXXX and equivalents $XX.X through statements outlook. information sources uncertainty. reflect XXXX million based our the first cash The May XX, of sufficient financing We

revenue the XXXX, follows. product XXXX reiterating our double as For guidance to financial to with XXX%. full are year providing over total in quarter expected revenue we second we guidance and expect Overall, grow

quarter $X.X XXXX, the total range we revenues million. of second the to of expect $X.X in million For

of revenue $X.X product $X.X range to expected million is quarter Second in the million.

year, and revenue internationally. to We and continued instrument test sales reflecting over of expanding and the ramp adoption expect to continue TXBacteria of US Panel TXDx course and rentals sales the reagent TXCandida in

contracts, we XXXX, placement the in XX the includes in contracts new roughly with to of number double XX in XX XXXX. For to instruments, quarter. XX expect, the This expected closed second contracts

X hospitals please average As you instruments new the months keep calls. testing go of have to X consider we diagnostic growth, instruments. and tests in guidelines to on required mind outlined and product any typically revenue prior patient live an following new It that takes are to validate as commences

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

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

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

to We expect these be to XX% approximately our levels. gross at XX% margins revenue

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

John McDonough

results and very you for much, product a summary, with solid In revenue contracts to are John. we good Thank in the to system XXXX off new quarter. start

strong More has early pipeline growing. encouraging. feedback come to is been TXBacteria utilization are sales and online and customers and Our the starting

laser on our to driving will team Moving remain focused and executing forward, momentum, instrument utilization. strategy new continue building our contracts TXDx securing commercial

moving for our for questions. in interest Company. development growth TX your On are for providing continued Operator, the incremental closer your for panels, our evening. this today's in Thank you opportunities we now front, the important for the new milestones for concludes call call to Biosystems. That participation remarks prepared and open we'll

Operator

Instructions]. [Operator

Our Cantor first Fitzgerald. of question comes Abrams from Jordan

Jordan Abrams

customers to you the force see and cycle trend you're this your also highlighted you programs call, how now Can and this stewardship seeing then call, what focusing a then you seeing the trend comment having with these target sales forward? On therefore last earlier on hospitals active sales shorter it just going of on. and

John McDonough

blood of spectrum X give infection. responding patients to is required days over have Essentially, much, Yes, culture sepsis, committees. to have put all day who more that. much spectrum all culture by couple last are suspected of broad one developed it about even results care -- half to are the managing Those here antibiotics. to and years who the clinicians, place physicians, stewardship lab involve to a day patients blood blood this, standard taking that patients, hospitals not absolutely. And tend are culture hospitals because to are law, of will that have are result remember the Many antibiotics broad on managing directors longer on than are in miss a literally the single of

needed only in drugs, have aren't superbugs. but on the antibiotics patient hours, are of patients that's the So getting responding -- XX drugs the reducing because care, who stewardship right that resistance causing the better we what's also many charter In the standard of of care therapy. after of these spectrum these you patients change broad are when committees

the Some literally Remember, about really where them are are of XX% suspected need are managing our progressed spectrum put broad the who patients of patients. are antibiotics, to they all point sepsis it.

So there's the XX% who the it's drug. put an and over-use the wrong XX% on of time XX% of are drug,

therefore so when people very a ESKAPE quickly are these lethal that we typically boy, they the understand committee to involved a and huge And not are move and major story. our have They are so result a which for rapid patient adopt. covered understand most closely hit getting where stewardship to the to with impact pathogens, they management, patient do

he secondary my to a day our -- one the who this -- who reducing director was he of his patients team responding, targeted it. of spoke can with between drug, So lab if in a a sees management case, patient as literally product the the patient ones cases benefit, of somewhere to a and a revealing benefit XXX and are I people because daily these doesn't and right he that about get he was part and of part effort is workload, on worry have XXX

Jordan Abrams

Great, also hospitals thanks. hospitals initially and then starting they Thanks. just are Can then you these patients. group And with elaborate some types leaving of with on starting are also you initially? a that patients of are mentioned the specific that out maybe who

John McDonough

And -- department, with saying, are the the patients we've that into based well, XX% of with emergency about exceptions, sometimes if ICU think about talked what all a department, of they of they're this cases. on they call. starting the There are as about then are for typically types that patients. and ED in department, if there patients emergency presenting go starting some they are the sepsis while represents Yes, which you emergency

in at to patient based population injuries usually step straight some There with are with emergency patients particular specific some So department abdominal it they on may all entering seeing be the ED, patient are institution. are their testing patients some but suspected cases. go who the

Jordan Abrams

it is algorithm around you just on a should describing And that? maybe, of mean, one then more. Can what where Okay. consider that you comment similar used specific I thoughts patients? just language was you're guys PACCARB -- just presentation any that or in was

John McDonough

I I will Scientific am who is this Tom our Lowery, question. and have Yes, presented him to answer it, -- Officer going Chief

Thomas Lowery

Yes.

of the is and all test. a algorithms algorithms hospitals, So discussing ECCMID several it's of with role, part those each presentations testing there discussion were our science the on and medical with there's lot the those tailoring one them liaison of of to hospital the algorithms those within discussed of roll help and patient at out

Operator

Leerink. comes Our SVB Souda next question Puneet of from

Unidentified Analyst

This was of... there sort more I you any is if TXBacteria Difficulty] wondering [indiscernible] provide for what ramp progress and color with Puneet. ED the around in the could the with [Technical

John McDonough

I'm getting not sorry, so quite up, you're the breaking we're question.

Unidentified Analyst

you hear me? Can

John McDonough

Yes.

Unidentified Analyst

around the the I progress emergency you department ramp any with TXBacteria and that. labs? feedback could wondering if and about provide was been the in the color from the Sorry there what's

John McDonough

the Yes, positive department. so We're reception. XX% -- about the a focused XX%, of the accounts very on are getting emergency

impacting gone have expected. We of patients. accounts The are process, in testing a few in seeing, have of script in how we're volumes line, ahead number a care. what I slightly we're we the examples about early They gave patient that that they live. are are actually we're now that

doubling So by think live that of on we're much a by next see the the of to up set accounts we as at many start accounts live QX expect that And the and QX. in we'll more accounts least live call encouraged that. to a have end are data as went ramp we broader of

Unidentified Analyst

around add Panel time? color of broaden And the should and panel any customer over menu on the could TXBacteria we expect to you feedback

John McDonough

by we entire positive. infections line those lethal, the identify feedback the top resistance pathogens the referred what and drugs. breadth not the is covered, as and infections are on are Yes, most that our is panel panel are not about know, know typically very to antibiotic XX% I of they covers of covered you often the ESKAPE the

having reception by testing evidenced the impact the patients. rate as positive of the been So on and adoption and the has we're patients

we the CARB-X to ahead pathogens my XX panel, program schedule. of and case. do in That's In markers few will actually of bacterial terms and times that to able expect talking panel to that I part that we've resistant say which intend about in definitely future overall in where only XX that, this say grow There broadening the we of to some career that. been program, but can is is that, point development I've this at been

Operator

question Genuity. Canaccord of comes next from Our Mark Massaro

Mark Massaro

the review bacteria. I in the more one you publication first for or us bacteria. peer detail, timing sense, weeks some like Congratulations of you journal I my might is but know on provided Can think on away? the launch months give this guess, the a is something be away of you

John McDonough

Weeks.

Mark Massaro

Okay, great.

John McDonough

we see but Obviously, based very control, on it don't what we to soon. know, we expect

Mark Massaro

but And you say Okay. proposals. proposal I I might missed prior a in about have you did it, number? know talked quarters

John McDonough

But cite I not number quarter. going We did We we can tell that do a to from not mentioned number. number was XXXX. that fourth up proposal know significantly was a I the you continue had in are that much. the

Mark Massaro

to about I ask guidance. wanted the Okay. also

of come So Consensus in below year. back revenue looking QX was the to was is for if half the XX% consensus. guidance about looking you the math, of for, the do

even will actually guidance of Your for would the the waiting suggest XX% QX half year. that be greater, back the in

QX, I So prepared in you more think but QX? give have guide you might much a than can how us be revenue just may QX sense for recognize you you to not

John McDonough

Yes. it's asking I important Mark, because an question, for one. Thanks that think

that's and with the the guidance pretty consistent out it's in in totally the difference that So the research I from growth the QX so much guidance that consensus for line difference is, is out so revenue. there there consensus think the QX was year, and product is gave between that relative the to revenue for we that

second that. bigger a XXXX expecting we're half we're So of research revenue of in confident and ramp about the pretty

to to difficult. likely the start and the ramp that cetera. but closing revenue it's Research work, is quarter, tied third doing We in et will see contracts

So believe going we revenue there, guidance will And is research it's for kind on it's revenue just lined in QX, product than number what research a you we with haven't some models out think just any the the number other revenue QX for provided in see the there. is and the year. confident remain of I that pretty that consensus not very of to But were is. be I flat consistent

Mark Massaro

revenue over Okay. on get XXX% million the research I'm sure just that And with of in for year, you the That full of year? if revenue. do or higher, this in you revenue million up would making should a to range so suggest research you products the $XX $XX

John McDonough

little the TAM. be higher well the a maybe would yes, second the That number is be the revenue case research or the a bit half than very the product of big But, could revenue in pretty year.

Mark Massaro

which you think the you And should that revenue remind what collaborators, us do will source collaborators Okay. can whether walk CARB-X, it's just biggest through the trigger just of us in bucket?

John McDonough

mean, to the I expect of but some majority for of it we is sure, contract that. CARB-X Yes, new research drive

Mark Massaro

sense field. on ask level you do or number? this to you're see comfortable also not or force. potentially wanted a the just say I to us or Okay. to add throughout on to sales with direct year give the whether in Can XX that you Want you had your opportunities so people

John McDonough

or prepared any add talk will one there we add yet. material to we're X probably way And one not where we're could people. in to that not just other channels are X, We at maybe, number, but looking or about that

Operator

Instructions]. [Operator

from Brozak comes Steve question of next Securities. WBB Our

Stephen Brozak

I've hop got two and back just then the I'll in queue.

The your detection you terms back maybe pathogen. going how of remember of the talking us piece model? New month first then Can pretty a about auris one, this kind Candida pathogen. or that? under you system ubiquitous directly that on about become CDC color of question give couple with any collaborated I've had in And I a front-page even it was a got Times has had back it another And much York a weeks now, and

John McDonough

CDC. also to is validated the a was have a was sensitivity, that we and a sample, then exactly and and potential only had US in is research the good, We've be yes, tends and been crisis it. an have auris product more thing collaboration hit really High if as and to the product product, going should adopt even direct the in be published a you're that here with that hospital where interest it we of they're going by to -- of [indiscernible] from type usage near it, CDC, ready developed Steve, use need interest your to be by the So, memory and in Candida level CDC able to auris that use Candida higher to it. even see in hospitals have got has that a are And the very that are bigger a place they customers in issue and with TXDx even in future. happy need planning that they customer Europe

Stephen Brozak

this follow-up that. How do just does the aware sensitivity because time. -- compare, to and is problem, particularly even basic again, about is how And to of I But but another turnaround obviously how everyone the culture it more does just understand, your on difficult importantly, ask what that model. culture, that? from then is compare specificity, to frankly treating on bug And that I'll

John McDonough

Lowery Tom let I'll take that one.

Thomas Lowery

Yes.

of So more system PCR any result, in hours tests time this then our sensitivity process, auris culture equivalent, fewer there. Candida is the Candida our is than the Panel paper culture, to is and XXXx and the sensitivity, get sensitive for and than XX-day a X.X CDC based auris fact out for the to better

to in validated least survey in basically a are several Candida then whether a to they there's at swap. talked publication for the they what the That's ICU other have wait auris. where that using results but get about I enthusiasm. where in lot just once surveillance for [indiscernible] Today the back not about it the colonized swapping with is patient is So and of to patient hospitals week, they also the test, blood, patients.

to get them and a provides test decontaminate about to same which represents significant an for value day make decisions our so opportunity isolating then results patients And opportunity hospitals.

Stephen Brozak

Now, obviously -- model, back system, to with going pathogen your because you were in the you the hospital. solidly fungal detection

placements much CPT in of terms of as these is critical they the it can now and it? you've in at of go how that. the even the hospital And as that where with this front looked hospitals purposes a go DRG just the detail as is you over you and situation rooms. how the you're of as edification, can looking the and important on into Now of at how the purposes revenue, for focusing Because become differences far difference for more obviously recognized each the emergency reimbursement,

John McDonough

the detect data that in to de-escalation a code, there we that you When it test TXCandida are with the allows to have nets plays drug DRG the that fewer line hospital. negative on ICU. TXBacteria. to multiple of because just in $XX,XXX are costs under hospital, goes hospital, right spending many, all you greater savings your which hospital. they the X sum but drugs, spending And results In one a sepsis TXBacteria them also are covers well TXCandida, have really economic drug the the stay They hospital, to starting the length savings a generally that sources drug, patient the to sum in I'd of all emerge in-patients and now because lump stay under typically and and points are get and this X X on the dynamic. and different like savings covered If $XX,XXX to have for or the straight hospital. it's a are even of diagnostics, put type entering upon your So go are and This $XX,XXX at the positive, test the to multiple codes about DRG of you in you the hospital, the a moment drug they all reduction hospital, the patient that all reimbursement infection, is for days but of many in drops for the there a lump out code, drugs, in depending that code, $XXX. into the -- and fewer typically patient, right earlier, in it's are for the ED data terms so ICU, to same X and typically bottom thereabout in how are all the now of they they DRG they days the the them

which roughly their the sent a There for is referring test another $XXX are department benefit, patient if is emergency home. second tested gets is, and to I negative reimbursement hospital the is in The costs they that what you're think of in that a $XXX.

in-patients available $XXX So the department hospital. is is available to emergency added not not who it's but benefit, for that for admitted patients an are additional

Stephen Brozak

at No, I'm exactly just looking described decided take proposition you value just -- what these for you systems have up. have here in this the obviously hospitals and the to

the to call, congrats thanks for the the growth. again, again, forward continued So on gentlemen. taking obviously And looking kickoff,

Operator

Knight comes question next from Janney. with Our Paul

Casey Woodring

is summer I wondering you see guys guys, I of on up could end and Hi, Paul. was Casey we is this on you submission by any had spring that think mentioned last possibly it an enrollment the Do seasons. updates TXLyme how the in Thanks. actually on FDA coming. year? was know this for call, ramps the if

John McDonough

Yes, Casey. great question,

is will but we So us, not the together, a then tell something could and certainly all enrollment take will they as rate data question by well. because we can out the which has it's moment, be at of it's of season sick pulling enrollment see probably time just filing upon that XXXX, some not commenced. the the dependent The on end that

Operator

question Yi next of from Chen comes Wainwright. H.C. Our

Yi Chen

guys the might tests talking and those in ramp X month the maybe X It and month getting going into a later year? see dovetail X I XX even cycle in the contracts first wondering volume will that on end about. quarter we bacteria the from more the in I many have like quarter, with volume then really of question sales at also some a you how the higher how was to the second to provide were seems validation just nice of to you up

John McDonough

Yi. question, great No, Yes.

So, look in our to placements. another contracts instrument QX XX that, in expectation XX at is

online a quarter. testing the actually We in be at second the the of in of of stream. the about with end will to quarter accounts expect of recurring expect patients to that at, first double US end accounts new We come that number the by have number testing the are patients TXBacteria the build on which revenue volume were we

couple had second go So, it's of this accounts progressing quarter. already, in meaning, nicely. quarter live We've already the a

the very things field are from results looking encouraging. the and very positive So are

Yi Chen

good hospital going and in numbers part down or And of some wondering continue like basis maybe it of of of larger in of seems round in later terms a I'm a if systems progress on first percentage systems. Difficulty]. quarter were lot these you larger into many made break many really how have [Technical hospital can you how these up these the ramp might

John McDonough

it's it's into some that the some we're we sales mix. could The earlier, not is would beds, on them XXX cases that what academic and typically it's they're bigger or they in talk is of we much certainly size. with have stewardship we're than somewhat centers, across to systems getting random a are the We're Yes, that I between them cycles but hospitals as typically hospital a hospitals. hospital about active and be one. But well. differentiator a even smaller less they certainly on say us, the committee closing focused talked and somewhere But do typical and whether they an big come if bigger XXX XXX-bed and with to the so In widespread. larger

Yi Chen

a And then final question. just housekeeping

XX% the about mentioned previously cover had bacterial of revenue. anticipate that to panels XX% to You the you

that's guidance your the wondering Panel? going versus Candida and forward Just still if that's

John McDonough

Yes.

we on track We with that. much guidance to change and very feel have no that at this point,

Operator

of comes JonesTrading. question Roy next Our from Soumit

Soumit Roy

-- quarter the for progress, Congrats against on headwinds. first the especially

a like of is Is the filing, any -- to close -- we back sense quick and we of the process the patient touch the size enrollment? data, a it quarter are should you where and expect XXX on are? still third where are program, or it this still Just what's thinking TXLyme in we touching very to get

John McDonough

answer Tom let I'll that. sure. Yes, Lowery Dr.

Thomas Lowery

Yes.

are it terms patients or and have very trials are data. Lyme the to in those determine on I'm is -- we of that commit to analysis important we're trial as working numbers patient. our going Lyme do to infections patients what our that to not clinical to timing going individual data the hands true you because when So from to share

So the and patient some so all time it takes to adjudicate records forth.

that releasing will I'm we when So going comment on be not data. to

Soumit Roy

you And this how -- you centers could or--? comment is like many have

Thomas Lowery

Sorry, go ahead.

Soumit Roy

just ClinicalTrials.gov, understand listed, to No, it's trying because one you center many on have? the so how

Thomas Lowery

So couple samples aren't we centers also are bunch on that we We've a actively of enrolling. other of listed ClinicalTrials.gov. sourced that from a centers have

we're patient very So unique target to we're is. actually, in terms what close of samples, individual our

the Lyme in all the see how gets out patients here then that unblind is just And thing And key how got once we'd I this data. as mentioned, so we season. to getting continue more and annualized works we the data

as So, type data. that not stream blood to that's a committing infection why not a we're share simple of we That's time as when stuff.

John McDonough

process is of a bit negative cases the to disease, and are And tricky are that diagnostics more, to positive very explain that when to go comparing and Lyme a so negative Tom's undetected a we as little true positive XX% referring weak. true we -- are other as prove a so adjudication Lyme this to

with know come into the critical But to really of trying certainly of the study -- we the up is state ways the working are that the part on tricky that's we true so And FDA going determine we that patient. trial. as that, but to know this with

Thomas Lowery

to and that one add indications patients color I and patients that that are to a indications a that's there -- do and not X appreciate there's help Just, protocol pursuing, had in another will of different is you're I mean, you involves our we the sure that what that to just do have their rash rash indication actually very are and a TXLyme results types not be report value identify EM test, a valuable. test, those Those rash would on. patient like without to that ones the very to not causing have a able rashes having ailment and patients is that's high be

reference to adds patients these all complexity indication also the However, for clinical infected. that pursuing clinical interpretation of the truly and

also we So samples in arms these studies. I we've have collected arms both of both the already sites listed, those other from those from and that but both of

And in of here. one a so, yes, just as as that's every It's have you simple blood these not patients. dimension the culture positive

John McDonough

a have patients It's will to rash XX% only that. of about estimated will and Yes, XX% add to and not. just

Operator

follow-up Mark Genuity. Canaccord of is question Massaro from next Our a

Mark Massaro

to So, vancomycin John, patient about that the example the I and therapy changed. appreciated was you the cited cancer resistant was

you like of to examples expect powerful, that curious also evangelize sort be as how but as messages. think can these far that I'm I pretty

So can marketing-wise, clinical spread that news help and how the sort can about that you you're just speak to sales-wise test the drive value? of of any initiatives can planning utility the we

John McDonough

up data and with it the it it adoption get print of and help out number working publish they that them standpoint. another phases a these working they're driving about institutions hope a of opinion conference with data, anecdotes these focused medical heart We we be called we're major customers we is the marketing as talked through effort. that Really convincing Mark, people which part there a will of to all Pharm I about ASM presence even tipping and point, as have is really and to take will and our out this coming we works and leaders are are publications, and there. hospitals, ECCMID, major that validation next and our on to Most those will validation which up. our those certainly the stories, gaining key really telling Yes. initiative data, publication that we important stories. some there MAD-ID validation there out telling those importantly, early liaison of go telling, the soon, point hitting those and that's actually soon at at Ds well. will from But a believe points, important be is week the got the science have stories, that are we're shows, We of anecdotes, and be team clinical the marketing think trial FDA that's we critical be is coming really going a really use major really

Mark Massaro

beyond sense internally doing past, success had what certainly you've other to for you're platform In drive Okay. disease. still parties with to demand And then you additional used areas infectious certainly and the give whether partnerships. try dialog your just you're Can obviously a on in with use not cases. me having be or can

John McDonough

Yes.

Development, Corporate have we a initiative. squarely is role of Head who that So focused on

diagnostics. good pipeline, are those field some a initiatives have going in of broader of We sepsis the

diagnostics outside to correlate in go growth and later this some expect of should we research some revenue that sepsis year. see of the activity Some of with

Operator

This as conference as concludes call. today's today's question-and-answer session well

Thank lines. for have your day. disconnect pleasant a participating may you and You

T2 Biosystems (TTOO) 2 May 192019 Q1 Earnings call transcript