TTOO - Earnings call transcript Q1 2021

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Operator

Good day and welcome to the T2 Biosystems First Quarter 2021 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Philip Taylor, Investor Relations. Please go ahead, sir.

Philip Taylor

Thank you, operator. everyone questions made will remind and management to to answers include like that by comments today I'd forward-looking statements. related plans marketing statements operating include to future Biosystems' Those financial results and products. for new and developing TX and

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

John Sperzel

John Thank and joining for review then quarter will we corporate I over will call Today, to financial answers. call for results the I who open turn some first our closing call. the the the review before our quarter company's XXXX I performance quarter you and priorities. first Sprague, earnings our updates across make our remarks will on questions and progress three for provide conference first

year compared an team quarter, first XXX% Product generated the XXX% million Biosystems revenue of to of period. million the the to increase was increase first year compared TX $X.X quarter During prior the of revenue period. an the prior $X during

test from $XX,XXX first robust was first of diagnostic fourth in from quarterly period, our test, instrument, tests, year was the ended panel in XX% TX sepsis the utilization COVID driven a test up $XXX,XXX year-over-year quarter utilization per of utilization the addition of in our annualized $XX,XXX and year-over-year sepsis sequential $XXX,XXX annualized XXXX, annualized instrument The TXCandida TXBacteria quarters. which with from U.S. the the increase prior In and XX%. of test contributions quarter quarter SARS-CoV-X sequential per COVID-XX to the up and of in increase a

to way We is that practiced advance mission around change to fundamentally world. continue our improved transformative medicine diagnostics of lives the through the the patients

want and COVID-XX challenging the opportunity primary is demonstrate commitment of presented that our sepsis our capabilities and new focus. I a our to to While to our technology reiterate mission,

products. potentially our benefits sepsis of management, improve cost to Our will and of benefits novel offer lifesaving TXCandida and the and We that lead utilization for care adoption for standard the believe saving sepsis TXResistance benefits patients for of increased test need and hospitals. greater cleaner clinical panels, TXBacteria, our products to sepsis the

that to sepsis. sepsis panels We anywhere administer care care presence their from Due In for for are at identify of committed optimal of sepsis fact order therapy Instrument patients cultures TXDx one and multiple to poor to five the critically that to take stream achieve of Blood of are and were risk positive often of protocols of blood further identification. infection. complicate the growth the as require continues the blood to establishing causing for days from to blood necessary sepsis the patients for despite current the blood standard detection to sepsis The samples of pathogen ill rely therapy a test culture patients are the are intended cultures pathogens. detection suspected for relies of to tests matters, of target care. in diagnostic sensitivity, To pathogens cases. our on only approximately such broad causing the empiric standard that on protocols standard antimicrobial of half current

year this nearly testing, skilled leading the XXXX, Department hospitalization. post the as the leading is Services hospitals, The traditional care Human both of Health species or achieved In for XXX,XXX death $XX in was ID and such from required and in lives Americans cost U.S. facilities more may cause the susceptibility. of of determination U.S. patients estimated results care billion. each sepsis claiming of Sepsis U.S. hospitals of of that and of molecular cost Additional than and the the alarming. tests and diagnostic standard culture be for microbiology nursing are disheartening

patients and sepsis face sepsis of amputation readmission may effects addition, due long-term of reoccurrence to survived sepsis limb syndrome. to who due In physical psychologic and the complications sepsis, hospital due post to

I identified in to about light why awareness five we have personal my been my sepsis, which and As the the am been was nerve my sales in broader the help survivor, donation. in using Donate for to a in several I and Courage: change lifesaving ago, Life the years the severe published understand America, am and pathogen hospitals resistant impact the heart spiking I a standard rehabilitation spent appropriate hospital, legs, nearly our shed is healthcare must led treatment. antibiotic have I diagnosed Had bacterial of organizations present to a of transplant, the sepsis raise patient, acquired patients donating diagnosis Leadership, Sepsis sepsis while broad a hospital the to book I in on that a XXX% I can and where for hours. sepsis. after recently had with sepsis leading damage in Powerful month the spectrum walk Several was I how multidrug experience sepsis. learn temperature targeted following to treated infections readmitted was hospital care at and nation's three to could immediately discharged about I to system. risk Lessons receive TXDx to of organ of technology with hospital I antibiotics for finally after the titled Succeed Strength Will Alliance from and both and the Instrument suffering a book again. and The was to

faster, enabling X%. TX is is five delayed of Our hour aim as within that can change three of critical, Biosystems each This therapies targeted rates care the mortality first up by standard increase at is to drawn. to the treatment of to blood targeted patient hours by

our TXDx mission create the detect culture. Our whole for believe days three our combined hours shareholder tests, sales; in by accelerating advancing three and enhancing directly success; with company We'll On identified last position priorities first one, our priority, FDA for off sales. sepsis we accelerate commercial from start outlined the Instrument, causing our corporate long the we've offer term a to that for our XXXX, three value, call, products and our two, only TXBacteria to positive and three, pathogens operations; five and we To TX priorities Biosystems our pipeline. wait blood sales. first to without need accelerating intended further addressing the panels able our blood to TXCandida approved sepsis

our the our instrument third Instrument team. increase to half We accomplish testing; sales the to COVID-XX U.S. and these testing from our expand commercial TXDx base. XXXX, utilization installed expand during sale First, of To base, and rebuilt second transition U.S. legacy in understand of to focused to sepsis our In we in sepsis the have installed test that reach, inter test objectives and XXXX, with of team. positions. U.S. sepsis geographic have driving and fully all, but the across filled one a a within we those clinically and requires account Instrument building U.S. adoption XX implementing protocols them hospitals sales created of sales TXDx regional the our model late into we use managers second,

field bread laboratorians, experience adoption combination the training hospital increase sepsis proposition articulate we the microbial Our products. accelerate structure understand into to clinical we specialists U.S. in regional hospital medical and and the utilization the In with designed the sepsis to specialists, wide that selling professionals the of and continue process. account a capital and affairs our completed sales sales now have stakeholders and across economic the They program value clinicians, committees team feel multiple whole application and committees. managers market hospital, to have are place our to right stewardship system equipment and administrators with

are Dr. clinical Affairs and the Aparna internally products, thought Our collaborators value our of Chief industry Ahuja, Department, both support through to and economic with evidence Medical newly help leaders. Officer, generating appointed and the Medical

be third pathogen days the products administration the patients blood time evaluating in to This can and technology time improvements internationally. is a detection tool see economic this expect to clinical presented as our seven patient of data studies culture. sepsis from length meta-analysis that team hospital we peer which our We costs blood targeted demonstrates a patient awareness we addition teams. TX use that's time health days. as meta-analysis XX the impact includes economic identification hospital to devices greater that and the decreased stay XX by antimicrobial ICU published per Dr. clinical community. five and and reviewed length data could We products. the TX by exemplifying significant Advisory independent medical culture, $XX,XXX accelerated our therapy TXBacteria accelerated potential will and hours, to authors important by of traditional of seek published TXCandida improving recently initiate and and compared a Ahuja in decreased multiple of the believe as much According to our of Again, as de-escalation marketing X.X diagnostic build the to XXXX, reduce Affairs for by scientific The outcomes. expert this benefits leading comparing species further as the prepare the conferences building the party to by the to empiric meta-analysis, the data is panels patients of medical sepsis by reduce to therapy clinical our of conclude theoretically the medical from journal, reduce of publication to our powerful stay review Biosystems at in XX the throughout creation United and This in key help use and to Biosystems by clinical time the XX of also Clinical and studies. States The hours, Board hours, hours, clinical medical of products sales Scientific efficiencies, tested. products

the the variant same confirm the detecting of previously TXSARS-CoV-X in I'm BXXXX We panel Africa to capable pleased and the on silico India, detecting based that on analysis, announced India. TXSARS-CoV-X South and valuable the capable currently We that tool new variants, While decreased hospital during variants U.S. our BXXXX TXSARS-CoV-X the variant since COVID-XX XXXX, U.S. like for efforts U.S. be our their COVID-XX continue customers. the COVID-XX to a peak hospitals in especially believe panel cases emerge, spreading will also January, continues of Brazil, UK is sequence, in as is panel have and analysis. based

TXCandida XXXX since And to access the hospital have occur panels While of instrument use sepsis the microbiology our treatment limited personnel increased the the of lab the selling accounts. of are anticipate has a greater with XX% the our TXDx instruments extent year for to of the pre-qualified for legacy instruments as panels pandemic. U.S. sepsis the strategy half reason TXSARS-CoV-X sepsis be in add evaluating We their used and sell progresses to interest hospital expect currently This only stated broader opportunity COVID-XX panel, and new pandemic this half access drive customers we the has and a second to why hospitals, to believe year. provides second integration adoption greater into of TXBacteria during testing. to sepsis of is sales protocols. sepsis This primarily that testing, to onset year, to been the utilizing we only in customers for why the to test sepsis panels test TXDx we been in and

utilization products. As focus close XX contracts sepsis XXXX. in remains remain to track We [ph] and XXXX driving previously on stated, adoption during instrument TXDx our at on least commercial our of

we our hospitals, will sold person, sales pleased we U.S. U.S that objectives. which is customers, two XXXX report calling actively I'm be advancing sepsis are in and testing. used TXDx virtually the leading toward instruments during Our routine and of to new to sales both force for April, on targeted

prioritize our in enhancing on to priority, cost structure. our continue enhancing across our improvement Moving to operations, and business, including operating XXXX second in gross operations margins product we will

company, months, we scaled significantly relationships. our the our is advance this capabilities our for strengthened continue success enhance as supply chain and pipeline the last future believe XX to important the We of we and manufacturing our operations. Over have product

gross cost has improvement While impact company's margins the pursue on improving and absorption, overall are a increased number volume initiatives, of in had continuing increasing a efficiency. product and to we overhead favorable the

priority, to will pathogens samples. Finally, our I our our our broadening now address for We of capabilities lead strategic detection pipeline. by from blood sepsis to technology the causing extend intend advancing whole third like

outlined total value base the defined is on focus the up development of and by in been contract ongoing product one achievement are the We toward the we the Our million completed Development Authority, phase has of of quarter upon XXXX during awarded certain Research advancing third BARDA. The contract. Advanced contract the contract Biomedical milestones in XXXX, under the of phases. $XX programs the to the contract paid or our milestones fulfilling option of currently working and

BARDA existing of have in and new product for and budget, we option we previously to of I have an including to panel, our the running the project the Today allow will schedule. opportunity generation announced terms contract ahead schedule which sepsis our us under provided the programs As BARDA our our stated, that panel. development team, one, been the instrument, that the of milestones biothreat terms accelerate next comprehensive modified revisit

recently totally by schedule single be of terms of the comprehensive resistance of funding. including whole to run XX% has direct detect bacterial to test the under success TXDx of all The as with is blood include is have sample TXDx caused our We is like contract, the traditional the a from of detect a designed with Candida milestones is disrupt on accelerate number to to the care. approximately and species parallel fully pathogens CDC blood infections and this patient we and timely the comprehensive resistant antibiotic hired a these The to The bloodstream panel a of the whole blood We designed test employees and panel single standard biothreat panel panel result to sample panel, automated threats this the identified instrument markers, [ph] programs being the number to BARDA United announced the that designed and detect instrument culture become has increased by approximately instrument. in three next a potential sepsis that in TXResistance workflow generation of six blood Today hours. new believe culture. a will in also comprehensive and instrument. The BARDA independent from sepsis panel random current an cleared agreed panel to full stains single pathogens a enable States Biosystems biothreat market. commercialize the to direct FDA a and product TX access, blood designed

patients To U.S. than people X.X to resistant a more frame than needed more infections in result. clearance. the selling While XX,XXX through to process studies, FDA trial, die pursue Unfortunately, the by this to In TXResistance from both specimen, these reflecting negative we detect panel Biosystems development under resistant blood gram in occur designation and test outlined our resistant additional we to conduct by to Europe panel, project. over are and CE XXX(k) need currently validation With need year, the Mark, before. the critical TXResistance FDA, pre-submission million on initiate and as go as BARDA, a of Sprague directly opportunity, TXResistance antibiotic the verification a with We clinical the the designed infection John In panel current TXResistance to panel workflow. I'll of identifying the culture. changer the costs, CARB-X, breakthrough a relies patients the ever Trust first right XX We details financial empiric believe therapy reducing many continue pathogens and the as which awarded the XXXX results FDA faster instead BARDA days, rapidly that more the without game device targeted turn is both our on funded timely markers infections. believe million support $X resistance XXXX, panel test the care to TX of faster, therapy quarter for enabling genes Wellcome resistance patients, be the with clinicians for therapies standard this hours gram of the treat results. for the providing patients than identify for we're purpose and now these to to granted partnership of in for infections from potentially of target can this blood over excited positive adequately resistant the and the to get manner, also do will in on enable whole are blood on to not culture that, typically each call mortality these hospitalization

John Sprague

increase year XXXX to increase was XXX% an the the $X.X Product million, compared for contribution of facility. John. under you, $X.X by XXX% for first the period. ATM as stock administrative an of the Product Research the guidance, period. million we the Thank we million, $XX facility have continue stock. compared expect million increase an $X loss compared $X.X Net Reiterating marketable were by million, $XX million, was sales. total product $XX net a was year driven an registration prior revenue quarter million, XX of or revenue million, of and million, was close an $XX.X $X quarter of securities and to at XXXX for least to of general and of in per driven million to driven back Sperzel We to BARDA XX the million BARDA the new March Instrument by revenues Research filed TXDx cash. activities. restricted $X increase and XXXX contract prior sepsis expect year per were a and remarks. $XX by driven development the $X.X was for any to by primarily prior increase million, cash prior including increased of date activities. first were costs common John compared million, you increased allow revenues period established research loss quarter contract contribution $X.X compared test sell first sales. increased increased headcount. to Selling, expenses to of $X.XX XXXX, period, an to and decrease a expenses $XX.X XX%, revenue of year company for XXXX and statement, million contracts. $X.X S-X $XXX,XXX lower COVID-XX driven period, Total To for the revenue share, share form to million March to year the full to of Thank year Total $XX.X sold not of million, of $X.X and we prior including closing of

John Sperzel

XXXX, Entering compared pipeline. our growth sales, progress first our growth which improving three our revenue operations with priorities, we included We're XXX% our advancing product set total and very corporate and the during revenue prior pleased accelerating quarter, of period. Most the XX% year sepsis test to compared our XX% XXX% continued the increase year compared to prior the and an to of importantly, increase prior period to quarter. increase sequential a with sales

We generate focused clinical novel a affairs strengthening sepsis we additional team teams products adoption support and customers. greater our have rebuilt to drive of and medical clinical our U.S. clinically economic to and our are data sales and

the of cost our including suspected operations product a opportunity the to sepsis. lead about [ph] of internal patients more in care We change and favorable in and management which remain we pipeline, our structure excited continue Panel TXResistance standard of for the enhance to the resulted have our

call open Operator? now questions. will the We to

Operator

of from you. Thank BTIG. Please ahead. Massaro go Mark take we first question [Operator our And Instructions]

Unidentified Analyst

guys, the this on is question. Mark. Thanks Hey for [indiscernible] for taking

John Sperzel

you. Thank

Unidentified Analyst

from to to wanted conversion COVID on along balancing XXXX? just how placing instruments with for instrument new sepsis over I anticipate you ask

John Sperzel

Sure.

excited same. sepsis installed territory in installed testing, sold base for place of the every we was really first sales mix legacy in instruments XX If able XXXX, half call the team not those which we are used second base, our are so of are there a we for to attract at looks sales and new all primarily look talented we territories, people. would we of that have the So, which super to new COVID

territories Some few in have fact of base. in instruments very those installed XX their

on XXXX, like, a to converting will and that what instruments this a for is have on load confident testing territory sepsis business two XX already a that whole And COVID closed a other instrument the instruments. may XX have selling plus that Clinic one particular mix sepsis John we testing, major the for new sales the that in have I of to very depending across April when accounts, driven said, of we looks heavy rep heavy look is So, the or in year, feel contracts. as in them we sales of Baylor say But we emphasis may Texas. plan sell may Mayo

already So, the about we have closures feel those two really that April. in of great we quality

Unidentified Analyst

one updates TXLyme, as seems Okay, of may the gen on so like And if much. so just you contract, the updating product me, awesome. Thanks just TXResistance, follow-up on could on it have the touch well from next effort, the BARDA modification pipeline, instrument? the some as

John Sperzel

Sure.

be option year So, structured in the last and were and and completed I as call, right on. six which obviously And is on so job. way three we there and in do to option same earn and a them a to the had and base approvals we our were did these and save working BARDA get schedule, so the hope into gen into along deliver are team our and so lives all have We so sepsis within get base when biothreat favorable to structure, option option can we market, the We're to has and one, that late option panel, the phase we we ahead the two, one, we that to then working. can from pace. four goal there able mentioned timing, meet two schedule, for the is in were to next milestones on one and option the milestones products that on patient the instrument into to finished, panel the opportunity that that we're the would two We our two able now the the to option The the the options. way pull was schedule milestones the milestones option we BARDA that. contract currently with ahead the under comprehensive which place Remember budget. delivered from way a one phase very we're of get to terrific three pull get position. We and the with best into option of lead is continue we funding done revisit regulatory that

going to get most are was the we on thing BARDA accomplish when line important to faster TXResistancepulled goal the we is originally to So, It all program. that as get of The into these projects. service able were an overall listed additional we able our view that. were one, TXResistance portfolio the We we as U. key into accelerate and we're in that to excited option it allow bring is S. about for to in program and a which super to us product milestones

on through LDT in initially test, make as of some question, that because partner, to as TXLyme of COVID, lab going a that progress hopeful our always strategy got far to TXLyme, remains put As just XXXX. strategy forward and we're has back been development our sell or the your hold a half obviously last but

Unidentified Analyst

for Okay, my questions. awesome. Thanks taking

John Sperzel

you. Thank

Operator

Thank you.

Genuity. question Yan Stephanie of Our Go ahead. from comes Canaccord next

Stephanie Yan

guys. am question. for Hi you taking on today. for Max Thank the I Masucci

that's any interaction size, of or view -- strength experiencing the specific or the of you're that smaller us So, regions an of first of sales you or whether terms a lab? lately you a strength hospital targeting, larger off, areas you in been give seeing customers customer a certain are integrated system healthcare have inside could types

John Sperzel

well are COVID targeting we're Baylor we critically place for ill are We're selling targeting That's systems a sepsis I well. products that just as we're the as that only mention hospitals. it's of as focused integrated testing on closed patients, only. standalone we and So, of whether too those obviously our systems course course for hospitals because or Mayo testing. of mix and

there. just a If just combination. all good to have team. We sales sometimes a cycle it's want a systems hired have and and we balance expanded longer they we sales So, target the

sold For the equipment. of most capital experience have diagnostic them lot very quarter selling extensive of They have were training. products, they of first Many labs. microbiology selling in a into

on was the proposition, aspects value technical economic very focused the course our of value the So, and products. clinical training and of proposition the

We very quarter. extent to spoken And in the we're we're as but process meetings We're lot sepsis. doing that our active way that instrument of it's we're and as testing year our can sepsis before. that progresses. whether in-person We in hospitals, in about the evolving products around a to that COVID we that bought we still increases are that utilizing we've a with transitioning saw utilization to never talking as access, in questions about in facilities customers via already more rep early market, with limiting much the customers can. came with have and for see zoom access or the do or in the to fact broadly speaking customers mix out We're customers we of in to talking telephone calls everything seeing sales their get the customers as first favorable of some first in our the in we

Stephanie Yan

could been us Okay, the more bit around And demand so give detail great. also seeing Thanks utilization you TXCandida? much. little trends and a withTXBacteria you've versus

John Sperzel

the than was So, impacted out of of the gained more already COVID products our in and which on customer TXCandida, consequence of focused FDA United sites. TXCandida the clearance. many evaluations States when TXBacteria TXBacteria majority just sales were those is of integrated really TXCandida, our ahead U.S. by in well in the are and a that came

a and for So, we see as that that's with mix obviously changing over well. greater priority time. our obviously The sales opportunity much TXBacteria is team

Stephanie Yan

so much. Okay, great.Thanks

John Sperzel

you. Thank

Operator

next Our go ahead. of [Operator question you. Instructions] Haynor Alliance from Please Global Thank comes Partners. Ben

Ben Haynor

gentlemen. afternoon Good the for taking questions. Thanks

for from the sepsis me, apparently just utilization off on nice First instruments. the improvement

do you impact that know, goes over see sepsis -- move the as I time as at is expect existing will will COVID through build? well, and loss have XXXX able accounts, that go we be testing that some You being you continue as there of accounts to upon that build but figure as here to existing XX accounts, [ph] know there these to some the beyond least

John Sperzel

to I average per sepsis would test our expect utilization We as $XXX,XXX the utilization continue to an instrument say platform. increase basis. We year on on targeted, an annualized per

was remember you about when a joined Ben, I ago it XX,XXX. If at year

it a came year. ended of think was this at It at We quarter at grew the ago, XXXX year QX We aXXX,XXX. XX,XXX. throughout XX,XXX. I out

there to little So, at were target it we that's We the there short right a get end sepsis part $XXX,XXX XXX,XXX. of bit utilizing is we're Again still still sooner. some hoped bit as for XXXX moving baseline get toward had but COVID to little unpredictable, that, or threshold are and of obviously customer. a but we we consider to set of a XXX,XXX, headwinds

that have the We that many well doing way. by beyond are

Ben Haynor

Okay. largely best right a or think higher you in past about the is I COVID few the then margin, revenue on mix in improvement, terms put know gross think margin of better to a coming to of what's a sepsis that? way grant/research panels panels function due of you the that at gross up that years the margin. anyway And it's Is in or

John Sperzel

like that? you to would Sprague, John take

John Sprague

Yes.

We've the and for The Ben, improving. drops volumes. benefit above in will bulk will But operational to you forecast in it right, pricing better put better we and efficiencies plant our from product I buys product think make continue but improving and the floor, of margin volume are on driving been the of absolutely better also pieces. able know all then which and about yields against trends the think throughput BARDA We've it's the is sales materials get product course improved components. margins helps.

Ben Haynor

analysis just of the That's can had that if patient published clinical was side and the like discuss would you onboard awfully clinical compelling. that year the to that compelling look And to ICU seems tested, what Okay. your can pull $XX,XXX you I efforts additional [ph] awfully see but and need remarks? obviously days X know you things, -- that published guess think seem, you that mid -- earlier hospitals anything then earlier -- might theoretical, a terms of in prepared this guess it's do for mentioned helpful. what about evidence thinking the out in get I of you I

John Sperzel

of agree, completely tested, up data in that's cost $XX,XXX to it's course I per based would on an compelling ICU average cost, that ICU, is very Ben, and patient days.

where in products continue excited We're clinical Medical And can depending we that develop economic Officer. to every going country would Chief to patient I the day data is the single to support both being why the raised the we're across bar Ahuja as Dr. is. say that So, and area and it. hired on that's about fluctuate and

Ben Haynor

guys. great. for taking Okay, questions Well the thanks

John Sperzel

you. Thank

John Sprague

you. Thank

Operator

session. you. Q&A our would concludes to turn the closing to Thanks I or this for call today's At This time host like additional over any remarks.

John Sperzel

forward you updating our Conference much look next you joining quarter. for First Call. We Thank to Quarter Earnings very

Operator

Thank your for you. Ladies Thank today's call. participation. and gentlemen you this concludes conference

disconnect. You may now

T2 Biosystems (TTOO) 6 May 212021 Q1 Earnings call transcript