Executive Summary

Q2 revenue was $2.0M (all sepsis products), flat year over year as 27% growth in sepsis test panels was offset by lower international instrument sales; operating loss improved 27% y/y to $(9.6)M on lower COGS and opex .
Management reiterated FY24 sepsis product revenue guidance of $10–$11M (+49% to +64% y/y) and highlighted 2H weighting (~~60% of FY) with 6 instruments already contracted in July (~~$0.4M Q3 revenue contribution) .
Strategic catalysts: (1) BD blood culture media shortage through Q4’24 could accelerate adoption of T2’s direct-from-blood tests; (2) potential U.S. distribution partnership with a multibillion-dollar healthcare company; (3) T2Lyme LDT launch planned Q3’24; (4) T2Resistance U.S. 510(k) submission targeted for Q4’24 .
Balance sheet/ops: ~~$30M CRG debt converted over the last year (≈80% reduction), $8.0M gross capital raised in Q2, facility consolidation (~~$1M annual savings) and PEO adoption (~$0.4M annual savings) support cash burn improvements, though quarter-end cash was $4.2M .

What Went Well and What Went Wrong

What Went Well
- Record Q2 and 1H sepsis test revenue; T2Bacteria and T2Resistance drove 27% y/y test-panel growth; cost of product revenue fell 45% y/y, and operating loss improved 27% y/y .
- Commercial momentum: new distribution agreements in Qatar, Hong Kong, Macau, Malaysia, Indonesia; 2 T2Dx instrument contracts in Q2 and 6 more in July (international) with ~$400K expected in Q3 revenue .
- CEO tone on catalysts: “We are highly encouraged by the record second quarter… Moving forward, we expect incremental sepsis revenue growth as a result of the recently FDA-cleared expanded T2Bacteria Panel… potential U.S. distribution partnership… and recently signed international distribution agreements” .
What Went Wrong
- Total revenue flat y/y at $2.0M as lower international instrument sales offset strong test growth; net loss was $(9.2)M and cash declined q/q to $4.2M despite capital raise .
- Instrument sales lighter than expected in Q2; several deals slipped into July (management indicated the rollover and Q3 capture) .
- T2Resistance internal V&V studies were delayed (manufacturing issues in 2H’23 prioritized supply to customers); U.S. 510(k) submission shifted from Q3 to Q4’24 .

Financial Results

YoY comparison – Q2 2023 vs Q2 2024

Metric (USD, unless noted)	Q2 2023	Q2 2024
Total Revenue ($000)	$1,964	$1,952
Cost of Product Revenue ($000)	$4,869	$2,693
Research & Development ($000)	$3,850	$3,361
Selling, General & Administrative ($000)	$6,296	$5,473
Loss from Operations ($000)	$(13,051)	$(9,575)
Net Loss ($000)	$(6,347)	$(9,243)
Diluted EPS	$(7.84)	$(0.66)
Commentary	Test revenue +27% y/y; total revenue flat due to lower international instruments	Material COGS and opex reductions improved operating loss

Sequential comparison – Q1 2024 vs Q2 2024

Metric (USD, unless noted)	Q1 2024	Q2 2024
Total/Product Revenue ($000)	$2,061	$1,952
Cost of Product Revenue ($000)	$4,202	$2,693
Research & Development ($000)	$3,721	$3,361
Selling, General & Administrative ($000)	$6,738	$5,473
Net Loss ($000)	$(13,534)	$(9,243)
Diluted EPS	$(2.66)	$(0.66)
Cash & Cash Equivalents (end of period, $000)	$6,208	$4,246
Commentary	Sepsis test panels grew +23% vs Q4’23; $2.2M ATM proceeds; debt reduced ~80% y/y by May 6	Panel sales +12% seq. but lower instruments; operating metrics improved; $8.0M gross raise in Q2

KPIs and operational items

KPI	Q1 2024	Q2 2024
Sepsis test revenue growth (y/y)	+25% (led by T2Candida and strong T2Resistance internationally)	+27% (led by T2Bacteria and T2Resistance)
T2Dx Instruments – contracts	8 total (5 OUS, 3 U.S.)	2 OUS; +6 OUS in July (Q3 rev ≈ $0.4M)
Distribution agreements	Qatar added	Qatar, Hong Kong, Macau; Malaysia, Indonesia (announced)
Guidance	$10–$11M sepsis revenue (FY24)	Reiterated $10–$11M (FY24)

Estimates vs actuals: Wall Street consensus (S&P Global) was unavailable at the time of analysis; we attempted retrieval but did not receive data. As a result, beats/misses vs consensus could not be determined.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Sepsis Product Revenue	FY 2024	$10.0M–$11.0M (49%–64% y/y)	$10.0M–$11.0M (49%–64% y/y)	Maintained
Notes			Guidance excludes potential T2Biothreat and T2Lyme sales	Still excludes T2Biothreat/T2Lyme; 2H weighted

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2023, Q1 2024)	Current Period (Q2 2024)	Trend
Supply chain / market conditions	No BD shortage; focus on eliminating backorders and improving manufacturing	FDA/CDC alerts on critical BD blood culture media shortage through Q4’24; T2’s direct-from-blood tests positioned as alternative	Positive adoption tailwind emerging
U.S. commercial strategy / partnerships	Exploring partnerships; expanding Vizient agreement (Q1)	In negotiations with a multibillion-$ U.S. healthcare company for distribution	Potential scale-up catalyst
Product performance	Record U.S. T2Bacteria in Q4; Q1 test growth +25% y/y	Record Q2 and 1H test revenue; +27% y/y test growth; +12% seq. panels	Strengthening
International expansion	New distributors: Netherlands, Belgium, Vietnam, Switzerland (Q4); Qatar (Q1)	Added Qatar, Hong Kong, Macau; Malaysia, Indonesia; 2 instruments Q2 and 6 in July	Broadening footprint
Regulatory / pipeline	FDA clearance: expanded T2Bacteria; T2Candida pediatric 510(k) filed (Q4–Q1)	T2Resistance U.S. 510(k) shifted to Q4’24; T2Lyme LDT launch planned Q3’24	Near-term catalysts, minor delay
Operations / costs	Backorders cleared; ERP cutover planned; debt reduction & covenant relief (Q4)	Facility consolidation (~~$1M/yr), PEO adoption (~~$0.4M/yr); debt down ~80% y/y	Cost structure improving

Management Commentary

“We are highly encouraged by the record second quarter and record first half of 2024 sepsis test revenue… we expect incremental sepsis revenue growth as a result of the recently FDA-cleared expanded T2Bacteria Panel… potential U.S. distribution partnership… and recently signed international distribution agreements” – John Sperzel, CEO .
“Second quarter 2024 revenues were $2 million, all from sepsis product sales… cost of product revenues were $2.7 million, a 45% decrease… SG&A down 13%… net loss was $9.2 million, $0.66 per share” – John Sprague, CFO .
“We believe the BD blood culture media bottle shortage represents an opportunity for T2 Biosystems to increase adoption of our direct-from-blood diagnostics” – CEO .
“We plan to submit [T2Resistance] 510(k) during the fourth quarter of 2024” – CEO .
“We plan to launch the T2Lyme Panel as a Laboratory Developed Test (LDT) in the third quarter of 2024” – CEO .

Q&A Highlights

2H revenue weighting and visibility: FY guide maintained; mix ~40% 1H / 60% 2H; 6 instruments already contracted in July to contribute ~$400K in Q3 .
U.S. distribution partner: Negotiations with a multibillion-$ healthcare company; expected to materially improve commercial scale; details pending .
Pipeline timelines: T2Resistance U.S. 510(k) moved to Q4’24 due to prior manufacturing constraints; T2Lyme LDT on track Q3’24 .
Commercial organization: U.S. sales force reduced in anticipation of partner; team structured to work with partner .
Balance sheet: S-3/ATM in place; management aims to be “smart” about timing capital raises around catalysts .

Estimates Context

S&P Global consensus estimates for Q2’24 revenue/EPS and forward periods were unavailable at the time of analysis despite attempted retrieval; as a result, we cannot quantify beats/misses vs consensus. We will update when S&P Global data becomes available.

Key Takeaways for Investors

Test-panel momentum is intact with record Q2/1H test revenue and significant y/y COGS/opex reductions driving improved operating loss; the growth algorithm increasingly hinges on test utilization rather than instruments alone .
The BD blood culture media shortage through Q4’24 is a unique, time-bound catalyst that directly benefits T2’s culture-independent positioning; proactive outreach is underway .
Near-term catalysts (Q3 T2Lyme LDT, potential U.S. distribution partnership, Q4 T2Resistance 510(k) submission) could re-rate adoption expectations and distribution reach .
International expansion is accelerating with multiple new distribution agreements and tangible instrument orders rolling from Q2 into Q3; this supports 2H guide weighting .
Balance sheet actions (debt-to-equity exchanges, equity capital, facility/PEO savings) reduce cash burn and interest burden; however, liquidity remains a monitoring point with $4.2M cash at Q2-end .
Watch the cadence of U.S. partner announcement/launch, Q3 instrument revenue capture (~$0.4M), and regulatory milestones as key stock reaction catalysts in 2H’24 .
Risk checks: instrument sales lumpiness; potential pipeline/regulatory slippage; need for timely capital infusions versus catalyst timing .

Additional Relevant Press Releases (context)

Earnings press release (July 29, 2024) with full financials and reiterated outlook .
8-K furnishing the press release and call transcript (July 29, 2024) .
Q1 2024 8-K and press release for prior-quarter trend analysis (May 6, 2024) .

T2 Biosystems, Inc. (TTOO)·Q2 2024 Earnings Summary