T2 Biosystems(US:TTOO)2023-11-14 22:50Financial Performance - Total revenue for the three months ended September 30, 2023, was $1.5 million, a decrease of $2.2 million from $3.7 million in the same period of 2022 [226]. - Product revenue decreased to $1.5 million, down from $2.6 million, primarily due to lower consumables sales of $0.8 million and lower instrument sales of $0.3 million [227]. - Contribution revenue was $0.0 for the three months ended September 30, 2023, compared to $1.0 million in the same period of 2022, reflecting a decrease of $1.0 million due to contract activity timing [228]. - Total revenue for the nine months ended September 30, 2023, was $5.5 million, a decrease of $11.3 million compared to $16.8 million for the same period in 2022 [239]. - Product revenue decreased to $5.1 million from $9.0 million, a decline of $4.0 million, primarily due to lower consumables sales of $2.9 million and product backorders [240]. - Contribution revenue fell to $0.4 million from $7.8 million, a decrease of $7.4 million, attributed to timing of contract activity under the BARDA agreement [241]. - The net loss for the nine months ended September 30, 2023, was $39.7 million, an improvement of $12.2 million compared to a net loss of $51.9 million in 2022 [239]. Cash Position and Funding - Cash and cash equivalents of $24.3 million as of September 30, 2023, are projected to be insufficient to fund operations through Q3 2024 [191]. - As of September 30, 2023, the company had unrestricted cash and cash equivalents of approximately $24.3 million, which is insufficient to fund operations through the third quarter of 2024 [256][259]. - Net cash used in operating activities was approximately $38.7 million for the nine months ended September 30, 2023, compared to $40.3 million for the same period in 2022 [266][267]. - Net cash provided by financing activities was approximately $51.9 million for the nine months ended September 30, 2023, primarily from common stock sales under the Equity Distribution Agreement [269]. - The company sold 3,167,968 shares of common stock for net proceeds of $41.0 million during the nine months ended September 30, 2023, compared to 36,687 shares for $28.1 million in 2022 [254]. Strategic Initiatives - A workforce reduction of nearly 30% was initiated in May 2023 as part of a strategic restructuring program [192]. - The company is exploring strategic alternatives, including potential acquisitions or mergers, to maximize value [192]. - The milestone-based product development contract with BARDA expired in September 2023, potentially impacting future product development funding [194]. Research and Development - Research and development expenses were $2.7 million, down from $6.4 million, a decrease of $3.7 million attributed to lower project-related expenses and reduced headcount [230]. - Research and development expenses were $11.0 million, down from $21.1 million, a reduction of $10.1 million due to lower employee headcount and decreased clinical trial costs [243]. - The T2Resistance Panel is expected to file for FDA 510(k) clearance in Q1 2024 [198]. Regulatory Approvals - The FDA granted 510(k) clearance for the T2Biothreat™ Panel on September 19, 2023 [204]. - The company submitted a 510(k) premarket notification to expand the T2Bacteria Panel to include Acinetobacter baumannii detection on October 12, 2023 [205]. Expenses and Impairments - Cost of product revenue decreased to $3.9 million from $6.1 million, a reduction of $2.2 million driven by manufacturing inefficiencies and lower sales [229]. - Selling, general and administrative expenses decreased to $6.0 million from $7.0 million, a reduction of $1.0 million primarily due to lower payroll and marketing expenses [231]. - Impairment of property and equipment was $2.5 million, including $2.3 million related to reagent manufacturing assets [232]. - Interest expense decreased to $1.1 million from $1.6 million in the prior year [233]. - The change in fair value of derivative related to the Term Loan resulted in a $0.2 million reduction of expense for the three months ended September 30, 2023 [234]. - The change in fair value of warrant liabilities was an expense of $0.9 million for the three months ended September 30, 2023, compared to a $0.2 million reduction of expense in the same period of 2022 [235]. Debt and Liabilities - The Term Loan Agreement includes a minimum cash balance requirement of $5.0 million, which was temporarily reduced to $500,000 until December 31, 2023 [272][279]. - The fair value of the derivative related to the Term Loan was $0.7 million as of September 30, 2023, down from $1.1 million on December 31, 2022 [280]. - The company entered into a waiver and consent with CRG in 2023, which included a permanent reduction of the minimum liquidity covenant to $500,000 [275][276]. - The principal maturity date of the Term Loan was extended to December 31, 2025, along with an extension of the interest-only payment period [276][279]. Accounts Receivable and Operating Assets - The company reported a decrease in accounts receivable of $1.0 million due to payments from BARDA and timing of sales [266]. - The net change in operating assets and liabilities for the nine months ended September 30, 2023, was primarily driven by a decrease in accrued expenses of $2.4 million [266].