Q2 2024 T2 Biosystems Inc Earnings Call

Greetings and welcome to T2 Biosystems Inc. 2nd Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the former presentation.

Operator: Porter, 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the former presentation.

Operator: Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Tripp Taylor, Investor Relations at T2. You may begin.

Operator: If anyone should acquire operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded.

If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Tripp Taylor, Investor Relations at T2. You may begin.

Trip Taylor: I will now turn the conference over to your host, Trip Taylor, Investor Relations at T2. You may begin.

Trip Taylor: Thank you, operator. I'd like to remind everyone that comments made by management today and answers to questions. We'll include forward-looking statements. Those include statements related to T2 Biosystems, future financial and operating results, and plans for developing and marketing new products. Forward-looking statements are based on estimates and assumptions as of today and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements. Including the risks and uncertainties described in T2 Biosystems' annual report on Form 10-K filed with the SEC on April 1, 2024, and other filings the company makes with the SEC from time to time.

Philip Taylor: Thank you, operator. I'd like to remind everyone that comments made by management today and answers to questions will include forward-looking statements. Those include statements related to T2 Biosystems' future financial and operating results and plans for developing and marketing new products. Forward-looking statements are based on estimates and assumptions as of today and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements, including the risks and uncertainties described in T2 Biosystems' annual report on Form 10-K filed with the SEC on April 1, 2024, and other filings the The company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. With that, I would like to turn the call over to Chairman and CEO John Sperzel. John.

Philip Taylor: Thank you, Operator. I'd like to remind everyone that comments made by management today and answers to questions will include forward-looking statements. Those include statements related to T2 Biosystems' future financial and operating results and plans for developing and marketing new products.

Speaker Change: Forward-looking statements are based on estimates and assumptions as of today and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements.

Speaker Change: including the risks and uncertainties described in T2 Biosystems' annual report on Form 10-K filed with the SEC on April 1, 2024, and other filings the company makes with the SEC from time to time.

Trip Taylor: The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law.

Speaker Change: The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law. With that, I would like to turn the call over to Chairman and CEO , John Sperzel. John .

Trip Taylor: With that, I would like to turn the call over to Chairman and CEO John Sperzel. Thank you all for joining our second quarter, 2024 results calls. Today I will start by discussing the July 2024 health alerts issued by multiple U.S. government agencies, informing health care providers that Beckton Dickinson or B.D. is unable to supply sufficient quantities of blood culture media bottles, which has the potential to favorably impact our sepsis revenue.

John J. Sperzel: Thank you all for joining our second quarter 2024 results call. Today, I will start by discussing the July 2024 health alerts issued by multiple U.S. government agencies informing health care providers that Bectin-Dickinson, or BD, is unable to supply sufficient quantities of blood culture media bottles, which has the potential to favorably impact our sepsis revenue. I will then provide a brief update on our three corporate priorities before turning the call over to John Sprague, our Chief Financial Officer, who will review our financial results. I will then provide closing remarks and open the call to questions and answers.

John J. Sperzel: Thank you all for joining our second quarter 2024 results call.

Speaker Change: Today I will start by discussing the July 2024 health alerts issued by multiple U.S. government agencies.

Speaker Change: informing health care providers that Beckman Dickinson, or BD, is unable to supply sufficient quantities of blood culture media bottles, which has the potential to favorably impact our sepsis revenue.

Trip Taylor: I will then provide a brief update on our three corporate priorities before turning the call over to John Sperzel, our Chief Financial Officer, who will review our financial results. I will then provide closing remarks and open the call for questions and answers. On July 10, 2024, the U.S. Food and Drug Administration, or FDA, issued an alert to inform health care providers of interruptions in the supply of B.D. back tech blood culture media bottles because of recent supplier issues and added blood culture media bottles to the medical device shortages list. According to the FDA alert, quote, the disruption in supply of this device is expected to impact patient diagnosis, follow-up patient management, and antimicrobial stewardship efforts.

Speaker Change: I will then provide a brief update on our three corporate priorities before turning the call over to John Sprague, our Chief Financial Officer, who will review our financial results.

Speaker Change: I will then provide closing remarks and open the call for questions and answers.

John J. Sperzel: On July 10th, 2024, the U.S. Food and Drug Administration, or FDA, issued an alert to inform health care providers of interruptions in the supply of BD-Bactech blood culture media bottles because of recent supplier issues and added blood culture media bottles to the medical device shortage list. According to the FDA alert, quote, the disruption and supply of this device is expected to impact patient diagnosis, follow-up patient management, and antimicrobial stewardship efforts. end quote

Speaker Change: On July 10, 2024, the U.S. Food and Drug Administration, or FDA, issued an alert to inform health care providers of interruptions in the supply of BD-Bactech blood culture media bottles because of recent supplier issues.

Speaker Change: and added blood culture media bottles to the medical device shortages list.

Speaker Change: According to the FDA alert, quote, the disruption in supply of this device is expected to impact patient diagnosis, follow-up patient management, and antimicrobial stewardship efforts, end quote.

Trip Taylor: On July 23, 2024, the US Centers for Disease Control and Prevention, or CDC, issued a health alert network to inform health care providers, laboratory professionals, and health care facility administrators. And state, tribal, local, and territorial health departments of a critical shortage of B.D. back tech blood culture media bottles. The CDC alert included a link informing that the B.D. back tech blood culture media bottles had an estimated shortage duration through Q4 2024. This is very important as the current guidelines for treating patients with a bloodstream infection or sepsis referred to as the CEP-1 bundle.

John J. Sperzel: On July 23rd, 2024, the U.S. Centers for Disease Control and Prevention, or CDC, issued a Health Alert Network to inform healthcare providers, laboratory professionals, Healthcare Facility Administrators, and State, Tribal, Local, and Territorial Health Departments of a critical shortage of BD-BAC Tech blood culture media bottles. The CDC alert included a link informing that the BD-BAC Tech blood culture media bottles had an estimated This is very important as the current guidelines for treating patients with a bloodstream infection or sepsis are referred to as the SEP-1 bundle.

Speaker Change: On July 23rd, 2024, the U.S. Centers for Disease Control and Prevention, or CDC, issued a Health Alert Network to inform health care providers, laboratory professionals, and the public.

Speaker Change: Healthcare Facility Administrators, and State, Tribal, Local, and Territorial Health Departments of a critical shortage of BD-BAC Tech blood culture media bottles.

Speaker Change: The CDC alert included a link informing that the BD-BacTeq blood culture media bottles had an estimated shortage duration through Q4 2024.

Speaker Change: This is very important as the current guidelines for treating patients with a bloodstream infection or sepsis

Trip Taylor: Festival. Specify a collection of blood cultures before the initiation of empirical treatment with broad spectrum antibiotics or antifungals. As such, blood culture is one of the most widely used diagnostic tests in the U.S. hospitals with an estimated 58 million tests run each year. According to the CDC, most blood cultures in the United States are performed using continuous monitoring blood culture systems, and the B.D. Continuous monitoring blood culture system is used in about half of all U.S. laboratories and is only compatible with B.D. back-tech blood culture media bottles.

John J. Sperzel: Specify a collection of blood cultures before the initiation of empirical treatment with broad-spectrum antibiotics or antifungals. As such, blood culture is one of the most widely used diagnostic tests in U.S. hospitals, with an estimated 58 million tests run each year. According to the CDC, most blood cultures in the United States are performed using continuous monitoring blood culture systems, and the BD continuous monitoring blood culture system is used in about half of all U.S. laboratories and is only compatible with BD, BAC Check, Blood Culture, and Media Bot.

Speaker Change: referred to as the SEP-1 bundle.

Speaker Change: Specify a collection of blood cultures before the initiation of empirical treatment with broad-spectrum antibiotics or antifungals.

Speaker Change: As such, blood culture is one of the most widely used diagnostic tests in U.S. hospitals, with an estimated 58 million tests run each year.

Speaker Change: According to the CDC, most blood cultures in the United States are performed using continuous monitoring blood culture systems.

Speaker Change: and the BD continuous monitoring blood culture system is used in about half of all US laboratories.

Speaker Change: and is only compatible with BD, BAC Tech, blood culture media bottles.

Trip Taylor: T2 Biosystems is focused on sepsis, and I will remind everyone that sepsis continues to exact an enormous human and economic toll. Sepsis is the leading cause of death in the U.S. hospitals, and claims the lives of approximately 350,000 Americans annually. Sepsis also represents the leading cause of hospitalization in the U.S., fusing our health care system and estimated $62 billion annually. Lastly, sepsis is the leading cause of 30-day hospital readmission in the United States. With 19% of sepsis survivors re-hospitalized within 30 days and 40% within 90 days. On previous earnings calls, I have described the limitations of relying on blood culture as a clinical specimen for patients at risk of sepsis, including poor sensitivity, that is, false negative results or missed infections, and slow time to result, that is, one to five days.

John J. Sperzel: T2 Biosystems is focused on sepsis, and I will remind everyone that sepsis continues to exact an enormous human and economic toll. Sepsis is the leading cause of death in U.S. hospitals and claims the lives of approximately 350,000 Americans annually. Sepsis also represents the leading cost of hospitalization in the U.S., costing our healthcare system an estimated $62 billion annually. Lastly, sepsis is the leading cause of 30-day hospital readmission in the United States, with 19% of sepsis survivors being re-hospitalized within 30 days and 40% within 90 days.

Speaker Change: T2 Biosystems is focused on sepsis.

Speaker Change: And I will remind everyone that Sepsis continues to exact an enormous human and economic toll.

Speaker Change: Sepsis is the leading cause of death in U.S. hospitals.

Speaker Change: and claims the lives of approximately 350,000 Americans annually.

Speaker Change: Sepsis also represents the leading cost of hospitalization in the U.S., costing our health care system an estimated 62 billion dollars annually.

Speaker Change: Lastly, sepsis is the leading cause of 30-day hospital readmission in the United States.

Speaker Change: with 19% of sepsis survivors re-hospitalized within 30 days and 40% within 90 days.

John J. Sperzel: In previous earnings calls, I have described the limitations of relying on blood culture as a clinical specimen for patients at risk of sepsis, including poor sensitivity, that is, false negative results or missed impact, and slow time to result, that is one to five days. Despite these shortcomings, blood culture remains the standard of care for patients at risk of sepsis, and except for T2 Biosystems' sepsis product. All other FDA-cleared products authorized for pathogen detection or antibiotic resistance testing require a positive blood culture as the clinical specimen. These blood culture-dependent diagnostic products, which include virtually all of our competitors, provide little to no clinical value if blood culture yields a false negative result due to poor sensitivity, or if blood culture is not available due to supply shortages. The blood culture supply interruption underscores the risk of creating guidelines based on a single diagnostic technology, that is, blood.

Speaker Change: On previous earnings calls, I have described the limitations of relying on blood culture as a clinical specimen for patients at risk of sepsis.

Speaker Change: including poor sensitivity.

Speaker Change: that is false negative results or missed infections.

Speaker Change: and slow time to result, that is one to five days.

Trip Taylor: Despite these shortcomings, blood culture remains as the standard of care for patients at risk of sepsis. And except for T2 Biosystems' sepsis products, all other FDA-cleared products authorized for pathogen detection or antibiotic resistance testing require a positive blood culture as the clinical specimen. These blood culture-dependent diagnostic products, which include virtually all of our competitors, provide little to no clinical value if blood culture yields a false negative result due to poor sensitivity, or if blood culture is not available due to supplier issues. The blood culture supply interruption underscores the risk of creating guidelines based on a single diagnostic technology that is blood culture.

Speaker Change: Despite these shortcomings, blood culture remains as the standard of care for patients at risk of sepsis.

Speaker Change: And except for T2 Biosystems sepsis products, all other FDA-cleared products authorized for pathogen detection or antibiotic resistance testing require a positive blood culture as the clinical specimen.

Speaker Change: These blood culture-dependent diagnostic products, which include virtually all of our competitors.

Speaker Change: provide little to no clinical value if blood culture yields a false negative result due to poor sensitivity or if blood culture is not available due to supplier issues.

Speaker Change: The blood culture supply interruption underscores the risk of creating guidelines based on a single diagnostic technology, that is blood culture.

Trip Taylor: We believe this is the perfect time to lobby for changes to the guidelines to include diagnostic products that are able to detect sepsis-causing pathogens and antibiotic resistance genes directly from blood and independent of blood culture. As a reminder, T2 Biosystems developed and is commercializing the only FDA-cleared diagnostics able to detect sepsis-causing pathogens directly from whole blood, without the need to wait days for a positive blood culture. Combination of our FDA-cleared T2DX instrument, T2 Bacteria Panel, and T2 Candidate Panel can detect sepsis-causing bacterial and fungal pathogens in three to five hours directly from blood.

John J. Sperzel: We believe this is the perfect time to lobby for changes to the guidelines to include diagnostic products that are able to detect sepsis-causing pathogens and antibiotic-resistant genes directly from blood and independent of blood clotting. As a reminder, T2 Biosystems developed and is commercializing the only FDA-cleared diagnostics able to detect sepsis-causing pathogens directly from whole blood, without the need to wait days for a positive blood test. Combination of our FDA-cleared T2DX instrument, T2 Bacteria Panel, and T2 Candida Panel can detect sepsis-causing bacterial and fungal pathogens in three No other company in the world can make that claim.

Speaker Change: We believe this is the perfect time to lobby for changes to the guidelines to include diagnostic products that are able to detect sepsis-causing pathogens and antibiotic-resistant genes directly from blood and independent of blood culture.

T2 Biosystems: As a reminder, T2 Biosystems developed and is commercializing the only FDA-cleared diagnostics able to detect sepsis-causing pathogens directly from whole blood, without the need to wait days for a positive blood culture.

T2 Biosystems: A combination of our FDA-cleared T2DX instrument, T2 Bacteria Panel, and T2 Candida Panel can detect sepsis-causing bacterial and fungal pathogens in 3-5 hours, directly from blood.

Trip Taylor: No other company in the world can make that claim. As part of the communication, both the FDA and CDC have recommended that healthcare providers develop strategies to minimize the use of blood culture media bottles. Our products can be effectively used to minimize the use of blood culture bottles, especially during this critical shortage. It can also provide results for the most common pathogens much faster than blood culture. Which can lead to faster, targeted antimicrobial treatment. It's important to note that our expanded T2 bacterial panel, which now includes the detection of as needed back to Balmaniye, covers approximately 75% of all substance-causing bacterial pathogens commonly found in bloodstream infections.

T2 Biosystems: No other company in the world can make that claim.

John J. Sperzel: As part of the communication, both the FDA and the CDC have recommended that health care providers develop strategies to minimize the use of blood culture media bottles. Our products can be effectively used to minimize the use of blood culture bottles, especially during this critical shortage, and can also provide results for the most common pathogens much faster than blood, which can lead to faster targeted antibiotics. It's important to note that our expanded T2 bacteria panel, which now includes the detection of Acinetobacter baumannii, covers approximately 75% of all sepsis-causing bacterial pathogens commonly found in bloodstream infections. Likewise, our T2 Candida panel covers approximately 90 percent of Candida species commonly found in bloodstream infections.

Speaker Change: As part of the communication, both the FDA and CDC have recommended that health care providers develop strategies to minimize the use of blood culture media bottles.

Speaker Change: Our products can be effectively used to minimize the use of blood culture bottles, especially during this critical shortage.

Speaker Change: and can also provide results for the most common pathogens much faster than blood culture.

Speaker Change: which can lead to faster targeted antimicrobial treatment.

Speaker Change: It's important to note that our expanded T2 bacteria panel, which now includes the detection of Acinetobacter baumannii, covers approximately 75% of all sepsis-causing bacterial pathogens commonly found in bloodstream infections.

Trip Taylor: Likewise, our T2 Candida panel covers approximately 90% of Candida species commonly found in bloodstream infections.

Speaker Change: Likewise, our T2 Candida panel covers approximately 90% of Candida species commonly found in bloodstream infections.

Trip Taylor: Now turning to review the significant progress we have made across our three corporate priorities: accelerating our sales, enhancing our operations, and advancing our pipeline. Starting with our first corporate priority, accelerating our sales. The T2 Biosystems team achieved record quarterly and first half-tept subsist test revenue, representing growth of 27% and 25%, respectively, compared to the prior year periods. This double-digit sales growth was driven by sales of our T2 Bacteria Panel and our T2 Resistance Panel. During the second quarter, we executed contracts for two T2 DX instruments in international markets and ended the quarter with a number of opportunities deep in our sales funnel.

John J. Sperzel: Now turning to review the significant progress we have made across our three corporate priorities: Accelerating our sales, enhancing our operations, and advancing our pipeline. Starting with our first corporate priority, accelerating our sales.

Speaker Change: Now turning to review the significant progress we have made across our three corporate priorities.

Speaker Change: accelerating our sales, enhancing our operations, and advancing our pipeline.

John J. Sperzel: The T2 Biosystems team achieved record quarterly and first half sepsis test results, representing growth of 27% and 25%, respectively, compared to the prior year period. This double-digit sales growth was driven by sales of our T2 Bacteria Panel and our T2 Resistance Panel. During the second quarter, we executed contracts for two T2DX instruments in international markets and ended the quarter with a number of opportunities deep in our sales pipeline.

Speaker Change: Starting with our first corporate priority, accelerating our sales.

Speaker Change: The T2 Biosystems team achieved record quarterly and first half sepsis test revenues.

Speaker Change: representing growth of 27% and 25% respectively compared to the prior year periods.

Speaker Change: This double-digit sales growth was driven by sales of our T2 bacteria panel and our T2 resistance panel.

Speaker Change: During the second quarter, we executed contracts for two T2DX instruments in international markets and ended the quarter with a number of opportunities deep in our sales funnel.

Trip Taylor: As expected, we have already executed contracts for an additional six T2 DX instruments in July of 2024, valued at approximately $400,000. In the US market, our commercial team continues to prioritize increasing sales of our sexist test panels. We believe the BD blood culture media bottle shortage represents an opportunity for T2 Biosystems to increase adoption of our direct-from-blood or blood culture-independent diagnostics, and our team is implementing a plan to proactively contact hospital microbiology departments.

John J. Sperzel: As expected, we have already executed contracts for an additional six T2DX instruments in July of 2024, valued at approximately $400,000. In the U.S. market, our commercial team continues to prioritize increasing sales of our sepsis test family. We believe the BD blood culture media bottle shortage represents an opportunity for T2 Biosystems to increase adoption of our direct-from-blood, or blood culture-independent, diagnosis, and our team is implementing a plan to proactively contact hospital microbiology. Additionally, over the last 12 months, we have been exploring a range of strategic alternatives, including U.S. commercial partnerships, to accelerate the growth of our business.

Speaker Change: As expected, we have already executed contracts for an additional six T2DX instruments in July of 2024, valued at approximately $400,000.

Speaker Change: In the U.S. market, our commercial team continues to prioritize increasing sales of our sepsis test panels.

Speaker Change: We believe the BD blood culture media bottle shortage represents an opportunity for T2 Biosystems to increase adoption of our direct-from-blood or blood culture-independent diagnostics, and our team is implementing a plan to proactively contact hospital microbiology departments.

Trip Taylor: Over the last 12 months, we have been exploring a range of strategic alternatives, including US commercial partnerships to accelerate the growth of our business. I'm pleased to inform you that we are in negotiations with a multi-billion-dollar healthcare company regarding a potential U.S. commercial partnership for the distribution of our products. In international markets, we continue to execute on our plan to expand our commercial footprint by entering into territory-exclusive distribution agreements to market and sell the T2 DX instrument, the T2 Bacteria Panel, the T2 Candidate Panel, and the T2 Resistance Panel. During the second quarter, we entered into new territory exclusive distribution agreements, covering Qatar, Hong Kong, and Macau.

Speaker Change: Over the last 12 months, we have been exploring a range of strategic alternatives, including U.S. commercial partnerships, to accelerate the growth of our business.

John J. Sperzel: I'm pleased to inform you that we are in negotiations with a multi-billion dollar healthcare company regarding a potential U.S. commercial partnership for the distribution of our product. In international markets, we continue to execute on our plan to expand our commercial footprint by entering into territory-exclusive distribution agreements to market and sell the T2DX instrument, the T2 Bacteria panel, the T2 Candida panel, and the T2 Resistance. During the second quarter, we entered into new territory exclusive distribution agreements covering Qatar, Hong Kong, and Macau.

Speaker Change: I'm pleased to inform you that we are in negotiations with a multi-billion dollar health care company regarding a potential U.S. commercial partnership for the distribution of our products.

Speaker Change: In international markets, we continue to execute on our plan to expand our commercial footprint by entering into territory-exclusive distribution agreements to market and sell the T2DX instrument, the T2 Bacteria panel, the T2 Candida panel, and the T2 Resistance panel.

Speaker Change: During the second quarter, we entered into new territory exclusive distribution agreements covering Qatar, Hong Kong, and Macau.

Trip Taylor: Earlier today, we announced a new territory exclusive distribution agreement covering Malaysia and Indonesia. The execution of these distribution agreements further expands our commercial footprint in the Asia-Pacific and Middle East regions, which we believe represents strong growth potential for our blood-culture independent rapid diagnostics. The introduction of the T2DX instrument and sepsis panels into Hong Kong, Macau, Malaysia, Indonesia, and Qatar will allow rapid detection of certain sepsis-causing pathogens and antibiotic resistance genes in hours instead of days, enabling clinicians to potentially achieve faster target therapy.

John J. Sperzel: Earlier today, we announced a new territory exclusive distribution agreement covering Malaysia and Indonesia. The execution of these distribution agreements further expands our commercial footprint in the Asia-Pacific and Middle East region, which we believe represents strong growth potential for our blood culture-independent rapid diagnosis. The introduction of the T2DX instrument and sepsis panels into Hong Kong, Macau, Malaysia, Indonesia, and Qatar will allow rapid detection of certain sepsis-causing pathogens and antibiotic resistance genes in hours instead of days, enabling clinicians to potentially achieve faster targeted therapy. We look forward to building lasting relationships with our newly appointed distributor.

Speaker Change: Earlier today, we announced a new territory-exclusive distribution agreement covering Malaysia and Indonesia.

Speaker Change: The execution of these distribution agreements further expands our commercial footprint in the Asia-Pacific and Middle East regions.

Speaker Change: which we believe represents strong growth potential for our blood culture independent rapid diagnostics.

Speaker Change: The introduction of the T2DX instrument and sepsis panels into Hong Kong, Macau, Malaysia, Indonesia, and Qatar will allow rapid detection of certain sepsis causing pathogens and antibiotic resistance genes in hours instead of days.

Speaker Change: enabling clinicians to potentially achieve faster targeted therapy.

Trip Taylor: We look forward to building lasting relationships with our newly appointed distributors. Our sepsis products continue to generate data further validating the value we can deliver to hospital microbiology labs to improve patient care. In May, T2 Biosystems' customers presented new clinical data to support the T2 Canada panel at the American Society for Microbiology ASM MicroG-2024 conference in Atlanta. The first presentation at ASM demonstrated how the use of the T2 Canada panel led to improve patient care for patients suspected of candidemia at Henry Ford Hospital. The findings highlighted the T2 Canada panel results being available over 38 hours faster than Bayda D.

Speaker Change: We look forward to building lasting relationships with our newly appointed distributors.

John J. Sperzel: Our sepsis products continue to generate data further validating the value we can deliver to hospital microbiology labs to improve patient care. In May, T2 Biosystems customers presented new clinical data to support the T2 Canada panel at the American Society for Microbiology ASM Microbe 2024 conference in Atlanta. The first presentation at ASM demonstrated how the use of the T2 Candidate Panel led to improved patient care for patients suspected of candidemia at Henry Ford Hospital.

Speaker Change: Our sepsis products continue to generate data further validating the value we can deliver to hospital microbiology labs to improve patient care.

Speaker Change: In May, T2 Biosystems customers presented new clinical data to support the T2 Canada panel at the American Society for Microbiology ASM Microbe 2024 Conference in Atlanta.

Speaker Change: The first presentation at ASM demonstrated how the use of the T2 Candidate Panel led to improved patient care for patients suspected of candidemia at Henry Ford Hospital.

John J. Sperzel: The findings highlighted the T2 Candidate Panel results being available, over 38 hours faster than beta D glucan tests, and the detection of over three times as many infections as blood culture. The evidence further supports the improved clinical outcomes that can be achieved with the T2 Canada Panel in the diagnosis and management of candidemia at a large urban academic school.

Speaker Change: The findings highlighted the T2 Candidate Panel results being available.

Trip Taylor: Glue Cantas and the detection of over three times as many infections as blood culture. The evidence further supports the improved clinical outcomes that can be achieved with the T2 Canada panel in the diagnosis and management of candidemia at a large urban academic center. Second presentation at ASM demonstrated clinical outcome data for patients admitted to an ICU at Henry Ford Hospital that utilized the T2 Canada panel compared to a control hospital using only the blood culture standard of care. Analysis revealed that more patients diagnosed with the T2 Canada panel were alive without any events and had a 58.6 probability of achieving a better outcome compared to conventional blood culture testing.

Speaker Change: over 38 hours faster than beta D glucan tests, and the detection of over three times as many infections as blood culture.

Speaker Change: The evidence further supports the improved clinical outcomes that can be achieved with the T2 Canada panel in the diagnosis and management of candidemia at a large, urban academic center.

John J. Sperzel: ASM demonstrated clinical outcome data for patients admitted to an ICU at Henry Ford Hospital that utilized the T2 Canada panel compared to a control hospital using only the blood culture standard of care. Analysis revealed that more patients diagnosed with the T2 Candida panel were alive without any events and had a 58.6 probability of achieving a better outcome compared to conventional blood culture. There was also less incidence of treatment failures, persistent candidemia, and infection confiscations in patients who were diagnosed via the T2 Candidate Panel compared to conventional testing.

Speaker Change: Second presentation at ASM demonstrated clinical outcome data for patients admitted to an ICU at Henry Ford Hospital that utilized the T2 Canada panel compared to a control hospital using only the blood culture standard of care.

Speaker Change: Analysis revealed that more patients diagnosed with the T2 Canada panel were alive without any events and had a 58.6 probability of achieving a better outcome compared to conventional blood culture testing.

Trip Taylor: There was also less incidents of treatment failures, persistent candidemia and infection confiscations in patients who were diagnosed to be of the T2 Canada panel compared to conventional testing. Overall, the presentation highlighted that the use of T2 Canada panel with an anti-fungal stewardship policy was associated with an overall medical clinical outcome compared to diagnosis with blood culture.

Speaker Change: There was also less incidence of treatment failures, persistent candidemia, and infection confiscations in patients who were diagnosed via the T2 Candidate Panel compared to conventional testing.

John J. Sperzel: Overall, the presentation highlighted that the use of the T2 Canada Panel with an antifungal stewardship policy was associated with a better medical-clinical outcome compared to diagnosis of blood clots. Beyond sepsis, we're also applying our technology to two additional areas: bioterrorism, and Lyme disease. We believe these additional applications have the potential to be significant growth catalysts for the company. On the T2 Biothreat Panel, we have entered into an agreement with Dr. Robin Robinson to serve as a strategic advisor.

Speaker Change: Overall, the presentation highlighted that the use of T2 Canada panel with an antifungal stewardship policy was associated with an overall medical clinical outcome compared to diagnosis with blood culture.

Trip Taylor: Beyond skepticism, we're also applying our technology to two additional areas: bioterrorism and Lyme disease. We believe these additional applications have the potential to be significant growth catalysts for the company. On the T2 Bio Threat panel, we have entered into an agreement with Dr. Robin to serve as a strategic advisor. He's currently fielding interest and identifying strong potential government targets to procure the T2 Bio Threat Panel. We believe the panel represents a strong market opportunity and has the important ability to protect our nation from the consequences of deliberate or accidental exposure to bio. We plan to launch our T2 line panel as a laboratory developed test for LDT during the third quarter of 2024 through a strategic partnership with Eco Laboratory.

Speaker Change: Beyond sepsis, we're also applying our technology to two additional areas.

Speaker Change: Bioterrorism, and Lyme disease.

Speaker Change: We believe these additional applications have the potential to be significant growth catalysts for the company.

Speaker Change: On the T2 Biothreat Panel, we have entered into an agreement with Dr. Robin Robinson to serve as a strategic advisor.

John J. Sperzel: He is currently fielding interest and identifying strong potential government targets to procure the T2 biothreat panel. We believe the panel represents a strong market opportunity and has the important ability to protect our nation from the consequences of deliberate or accidental exposure to biosecurity. We plan to launch our T2 line panel as a Laboratory Developed Test, or LDT, during the third quarter of 2024 through a strategic partnership with EcoLaboratories. We believe there are numerous advantages of launching the T2 LIME panel in this format, including faster time to market, higher test throughput, and stronger product contribution, as the LDT format does not require the use of the T2DX instrument or the costs associated with a cartridge Internal market research confirms that reference laboratories often charge greater than $250 for two-tiered antibody Lyme tests and greater than $250 for PCR Lyme testing.

Robin Robinson: He's currently fielding interest and identifying strong potential government targets to procure the T2 Biothreat Panel.

Robin Robinson: We believe the panel represents a strong market opportunity and has the important ability to protect our nation from the consequences of deliberate or accidental exposure to biothreats.

Robin Robinson: We plan to launch our T2 line panel as a Laboratory-Developed Test, or LDT, during the third quarter of 2024 through a strategic partnership with ECO Laboratory.

Trip Taylor: We believe there are numerous advantages of launching the T2 line panel in this format, including faster time to market, higher test throughput, and stronger product contribution margins. As the LDT format does not require the use of the T2DX instrument or the costs associated with a cartridge. Internal market research confirms that reference laboratories often charge greater than $250 for two-tiered antibody line tests, and greater than $250 for PCR line tests. It's important to note that sales of the T2 Biosystems panel and T2 line panel are not in our current 2024 revenue guidance. Potential sales during 2024 represent upside to that guidance.

Robin Robinson: We believe there are numerous advantages of launching the T2 LIME Panel in this format, including faster time to market,

Robin Robinson: higher test throughput, and stronger product contribution margins, as the LDT format does not require the use of the T2DX instrument or the costs associated with a cartridge.

Robin Robinson: Internal market research confirms that reference laboratories often charge greater than $250 for two-tiered antibody Lyme tests and greater than $250 for PCR Lyme tests.

John J. Sperzel: It's important to note that sales of the T2 Biothreat Panel and the T2 Lyme Panel are not in our current 2024 Revenue Guide; potential sales during 2024 represent upside for that guy. Moving to our second corporate priority, enhancing our operations. We continue to take important steps to transform our balance sheet and improve our costs. Over the past 12 months, we have reduced our debt by approximately 80% by converting $40 million of our term loan with entities affiliated with CRG Servicing, LLC, or CRG, to common stock.

Robin Robinson: It's important to note that sales of the T2 Biothreat Panel and T2 Lyme Panel are not in our current 2024 Revenue Guidance.

Robin Robinson: So potential sales during 2024 represent upside to that guidance.

Trip Taylor: Moving to our second corporate priority, enhancing our operations, we continue to take important steps to transform our balance sheet and improve our cost structure. Over the past 12 months, we have reduced our debt by approximately 80 percent by converting $40 million of our term loan with entities affiliated with CRG Servicing LLC or CRG to common stock. This has significantly strengthened our balance sheet and reduced our annual interest payments by approximately $3.2 million. During the second half of 2024, we plan to further consolidate our real estate space by exiting our facility at Fort Hartwell Avenue in Lexington, Massachusetts, and consolidating those operations into our headquarters at 101 Hartwell Avenue in Lexington, Massachusetts.

Robin Robinson: Moving to our second corporate priority, enhancing our operations.

Robin Robinson: We continue to take important steps to transform our balance sheet and improve our cost structure.

Robin Robinson: Over the past 12 months, we have reduced our debt by approximately 80 percent.

Robin Robinson: by converting $40 million of our term loan with entities affiliated with CRG Servicing, LLC, or CRG, to common stock.

John J. Sperzel: This has significantly strengthened our balance sheet and reduced our annual interest payments by approximately $3.2 million. During the second half of 2024, we plan to further consolidate our real estate by exiting our facility at 4 Hartwell Avenue in Lexington, Massachusetts, and consolidating those operations into our headquarters at 101 Hartwell Avenue in Lexington, Massachusetts.

Robin Robinson: This has significantly strengthened our balance sheet and reduced our annual interest payments by approximately $3.2 million.

Robin Robinson: During the second half of 2024, we plan to further consolidate our real estate space.

Robin Robinson: by exiting our facility at 4 Hartwell Avenue in Lexington, Massachusetts, and consolidating those operations into our headquarters at 101 Hartwell Avenue in Lexington, Massachusetts.

Trip Taylor: We expect this move to reduce our facility costs by approximately $1 million annually. Effective August 1st, 2024, we are partnering with ADP TotalSource as our professional employer organization, or PEO, to provide comprehensive and cost-effective HR benefits, including healthcare benefits, workers' compensation, payroll, and tax support, and HR guidance. We estimate this change will result in annualized savings of approximately $400,000. Since early 2023, we have reduced our headcount by approximately 30 percent to 113 employees. At the same time, we have reduced employee-related operating expenses. Finally, during the second quarter, we expanded the use of our Oracle ERP system to improve inventory planning and material management.

John J. Sperzel: We expect this move to reduce our facility costs by approximately $1 million annually. Additionally, effective August 1st, 2024, we are partnering with ADP TotalSource as our Professional Employer Organization, or PEO, to provide comprehensive and cost-effective HR benefits, including healthcare benefits, workers' compensation, K-Roll, tax support, and HR Guidance.

Robin Robinson: We expect this move to reduce our facility costs by approximately $1 million annually.

Robin Robinson: Effective August 1st, 2024, we are partnering with ADP TotalSource as our Professional Employer Organization or PEO.

Robin Robinson: to provide comprehensive and cost-effective HR benefits, including health care benefits, workers' compensation, payroll and tax support, and HR guidance.

John J. Sperzel: We estimate this change will result in annualized savings of approximately $400,000. Since early 2023, we have reduced our headcount by approximately 30% to 113 employees. At the same time, we have reduced employee-related operations.

Robin Robinson: We estimate this change will result in annualized savings of approximately $400,000.

Robin Robinson: Since early 2023, we have reduced our headcount by approximately 30% to 113 employees.

Robin Robinson: At the same time, we have reduced employee-related operating expenses.

John J. Sperzel: Finally, during the second quarter, we expanded the use of our Oracle ERP system to improve inventory planning and material management. We believe the Oracle ERP expansion will favorably impact inventory levels, cost of goods sold, and ultimately improve cash flow. Moving to our third corporate priority, advancing our, We have three tests in our pipeline, including the U.S. T2 Resistance Panel, the T2 Line Panel, and the expanded T2 Candida Panel to include detection of candida auris. These three tests, or test panels, have each received FDA breakthrough device designation, and each share a critical requirement for rapid detection of the causative pathogen and targeted antimicrobials. The U.S.

Robin Robinson: Finally, during the second quarter, we expanded the use of our Oracle ERP system to improve inventory planning and material management.

Trip Taylor: We believe the Oracle ERP expansion will favorably impact inventory levels, cost of goods sold, and ultimately improve cash flow.

Robin Robinson: We believe the Oracle ERP expansion will favorably impact inventory levels, cost of goods sold, and ultimately improve cash flow.

Trip Taylor: Moving to our third corporate priority, advancing our pipeline. We have three tests in our pipeline, including the U.S. Teacher Resistance Panel, the Teacher Line Panel, and the Expanded Panel to include detection of Candidora. These three tests or test panels have each received FDA breakthrough device designation and each share a critical requirement for rapid detection of the causative pathogen and targeted antimicrobial treat. The US Teacher Resistance panel is a direct-from-blood molecular diagnostic test that runs on the FDA-clear T2DX instrument and simultaneously detects 13 antibiotic resistance genes in just three to five hours, without the need to wait days for a positive blood culture.

Robin Robinson: Moving to our third corporate priority, advancing our pipeline.

Robin Robinson: We have three tests in our pipeline.

Robin Robinson: including the U.S. T2 Resistance Panel, the T2 Lime Panel, and the expanded T2 Candida Panel to include detection of Candida auris.

Robin Robinson: These three tests, or test panels, have each received FDA breakthrough device designation.

Robin Robinson: and each share a critical requirement for rapid detection of the causative pathogen and targeted antimicrobial treatment.

John J. Sperzel: The Teacher Resistance Panel is a direct-from-blood, molecular diagnostic test that runs on the FDA-cleared T2DX instrument and simultaneously detects 13 antibiotic resistance genes in just three to five hours, without the need to wait days for a positive blood sample. We believe the T2 Resistance Panel will be a significant catalyst to drive broader adoption of our T2DX instrument and our T2 Bacteria. In March, we issued a press release to announce the results of a new prospective study that was published in the Journal of Clinical Microbiology, highlighting the performance and clinical benefits of the T2 resistance panel compared to blood culture and Standard Microbiology, including high accuracy that is 94.7 percent sensitivity and 97.4 percent specificity. Rapid Turnaround, that is, results available in 4.4 hours compared to 58.3 hours, and clinical impact, that is, clinical interventions in 41% of the patients in the study, 24 of 59 patients.

Speaker Change: The U.S. Teacher Resistance Panel is a direct-from-blood,

John J. Sperzel: We believe this performance data represents the enormous potential of this unique and highly differentiated product to reduce cost, improve patient outcomes, and reduce the threat of antibiotic resistance. We expect this to be a catalyst for greater adoption of the T2 resistance panels in countries where we currently market them under a CE mark. We also believe the international experience with the direct-from-blood or culture-independent detection of antibiotic-resistant genes is an important precursor to our launch in the U.S. market, due to our priority to provide products for our existing customers. However, our internal verification and validation studies were slightly delayed.

Speaker Change: molecular diagnostic test that runs on the FDA cleared T2DX instrument and simultaneously detects 13 antibiotic resistance genes.

Speaker Change: in just 3-5 hours, without the need to wait days for a positive blood culture.

Trip Taylor: We believe the T2 Resistance panel will be a significant catalyst to drive broader adoption of our T2DX instrument and our T2 Bacteria panel. In March, we issued a press release to announce the results of a new prospective study that was published in the Journal of Clinical Microbiology, highlighting the performance and clinical benefits of the T2 Resistance Panel compared to blood culture and standard microbiology methods, including high accuracy, that is 94.7% sensitivity and 97.4% specificity. Rapid turnaround time, that is results available in 4.4 hours compared to 58.3 hours. And clinical impact, that is clinical interventions in 41% of the patients in the study, 24 of 59 patients.

Speaker Change: We believe the T2 Resistance Panel will be a significant catalyst to drive broader adoption of our T2DX instrument and our T2 Bacteria Panel.

Speaker Change: In March, we issued a press release to announce the results of a new prospective study that was published in the Journal of Clinical Microbiology.

Speaker Change: highlighting the performance and clinical benefits of the T2 resistance panel compared to blood culture and standard microbiology methods.

Speaker Change: including high accuracy, that is 94.7% sensitivity and 97.4% specificity.

Speaker Change: Rapid Turnaround Time.

Speaker Change: That is results available in 4.4 hours compared to 58.3 hours.

Speaker Change: and clinical impact, that is clinical interventions in 41% of the patients in the study, 24 of 59 patients.

Trip Taylor: We believe this performance data represents the enormous potential of this unique and highly differentiated product to reduce cost, improve patient outcomes, and reduce the threat of antibiotic resistance. We expect this to be a catalyst for greater adoption of the T2 Resistance panel in countries where we currently market under a CE mark. We also believe the international experience with the direct from blood or culture independent detection of antibiotic resistance genes is an important precursor to our launch in the US market. Due to our priority to provide products for our existing customers, our internal verification and validation studies were slightly delayed.

Speaker Change: We believe this performance data represents the enormous potential of this unique and highly differentiated product to reduce cost, improve patient outcomes, and reduce the threat of antibiotic resistance.

Speaker Change: We expect this to be a catalyst for greater adoption of the T2 resistance panels in countries where we currently market under a CE mark.

Speaker Change: We also believe the international experience with the direct-from-blood or culture-independent detection of antibiotic resistance genes is an important precursor to our launch in the U.S. market.

Speaker Change: Due to our priority to provide products for our existing customers, our internal verification and validation studies were slightly delayed.

Trip Taylor: As a result, we now plan to submit a 510(k) pre-market notification to the US Food and Drug Administration, or FDA, during the fourth quarter of 2024. And we expect to receive a prioritized FDA review due to its Breakthrough Device designation. The T2 LINE panel is a direct from blood molecular diagnostic test designed for the early detection of RELIA or DORFRI. The bacterium that causes Lyme disease in the United States. LINE disease is the leading vector-borne disease in America, with an estimated 3.4 million tests performed each year. The current diagnostic products is a two-tiered antibody test algorithm that relies on the presence of antibodies and can only be used accurately four to eight weeks after infection.

John J. Sperzel: As a result, we now plan to submit a 510k pre-market notification to the U.S. Food and Drug Administration, or FDA, during the fourth quarter of 2024, and we expect to receive a prioritized FDA review due to its breakthrough device designation. The T2 Lyme Panel is a direct-from-blood molecular diagnostic test designed for the early detection of Borrelia burgdorferi, the bacterium that causes Ly Lyme disease is the leading vector-borne disease in America, with an estimated 3.4 million tests performed each year.

Speaker Change: As a result, we now plan to submit a 510K pre-market notification to the U.S. Food and Drug Administration, or FDA, during the fourth quarter of 2024.

Speaker Change: And we expect to receive a prioritized FDA review due to its breakthrough device designation.

Speaker Change: The T2 Lyme Panel is a direct-from-blood molecular diagnostic test designed for the early detection of Borrelia burgdorferi.

Speaker Change: the bacterium that causes Lyme disease in the United States.

Speaker Change: Lyme disease is the leading vector-borne disease in America, with an estimated 3.4 million tests performed each year.

John J. Sperzel: The current diagnostic products are a two-tiered antibody test algorithm that relies on the presence of antibodies and can only be used accurately four to eight weeks after infection. If left untreated, the bacteria may spread throughout the body and become much harder to eradicate and treat effectively. Although early symptoms of Lyme disease are similar to the flu, Reliabird-Dorfrey infections can lead to chronic debilitating diseases.

Speaker Change: The current diagnostic product is a two-tiered antibody test algorithm that relies on the presence of antibodies and can only be used accurately four to eight weeks after infection.

Trip Taylor: If left untreated, the bacteria may spread throughout the body and become much harder to eradicate and treat effectively. Although early symptoms of LINE disease are similar to the flu, RELIA or DORFRI infections can lead to chronic, debilitating disease. To address this critical unmet need, we've developed an extremely sensitive diagnostic test for the detection of early LINE disease. with an analytical sensitivity that is in line with our FDA-cleared sets of tests. We've recently completed clinical studies required to launch the T2 line panel as a lab-developed test. We believe our test will detect a line disease within the first 30 days post-infection compared to antibody tests that can take 30 to 60 days post-infection.

Speaker Change: If left untreated, the bacteria may spread throughout the body and become much harder to eradicate and treat effectively.

Speaker Change: Although early symptoms of Lyme disease are similar to the flu, Reliabird-Dorfrey infections can lead to chronic debilitating disease.

John J. Sperzel: To address this critical, unmet need, we've developed an extremely sensitive diagnostic test for the detection of early Lyme disease, with an analytical sensitivity that is in line with our FDA-cleared sepsis test. We have recently completed clinical studies required to launch the T2 Lyme panel as a lab-developed test. We believe our test will detect Lyme disease within the first 30 days post-infection, compared to antibody tests that can take 30 to 60 days post-infection.

Speaker Change: To address this critical unmet need, we have developed an extremely sensitive diagnostic test for the detection of early Lyme disease, with an analytical sensitivity that is in line with our FDA-cleared sepsis tests.

Speaker Change: We've recently completed clinical studies required to launch the T2 line panel as a lab-developed test.

Speaker Change: We believe our tests will detect Lyme disease within the first 30 days post-infection compared to antibody tests that can take 30 to 60 days post-infection.

Trip Taylor: As I mentioned earlier on the call, we plan on launching the T2 line panel as an LDT in the third quarter of 2024 through a strategic partnership with Eco Laboratory. Our ultimate objective is to provide early line disease results to major U.S. reference laboratories. We believe we can utilize their retail networks to collect patient samples, which would potentially allow us to provide testing to line patients across the country. These samples would then be sent to our LDT laboratory partner to perform the T2 Live Panel in their lab.

John J. Sperzel: As I mentioned earlier on the call, we plan on launching the T2 line panel as an LDT in the third quarter of 2024 through a strategic partnership with EcoLaboratories. Our ultimate objective is to provide early Lyme disease results to major U.S. reference laboratories. We believe we can utilize their retail networks to collect patient samples, which would potentially allow us to provide testing to Lyme patients across the country. These samples would then be sent to our LDT laboratory partner to perform the T2 live panel in their lab. Again, it's important to note that T2 line panel sales are not in our current 2024 guidance. So, any potential sales during 2024 represent upside to that guidance.

Speaker Change: As I mentioned earlier on the call, we plan on launching the T2 line panel as an LDT in the third quarter of 2024 through a strategic partnership with Ecolaboratory.

Speaker Change: Our ultimate objective is to provide early Lyme disease results to major U.S. reference laboratories.

Speaker Change: We believe we can utilize their retail networks to collect patient samples, which would potentially allow us to provide testing to Lyme patients across the country.

Speaker Change: These samples would then be sent to our LDT laboratory partner to perform the T2 live panel in their lab.

Trip Taylor: Again, it's important to note that T2 line panel sales are not in our current 2024 guidance. Any potential sales during 2024 represent upside to that guidance. The expanded T2 candidate panel, which will include the detection of candidate Aorus as a direct-from-blood molecular diagnostic test designed to detect candidate species in just three to five hours without the need to wait days for a positive blood culture. We believe the addition of candidate Aorus test will strengthen the value proposition of our T2 candidate panel and lead to increased adoption. Candid Aorus is a multi-drug-resistant fungal pathogen that has a mortality rate of up to 60 percent and is recognized as a serious global health threat by the CDC and the World Health Organization.

Speaker Change: Again, it's important to note that T2 line panel sales are not in our current 2024 guidance, so any potential sales during 2024 represent upside to that guidance.

John J. Sperzel: The expanded T2 Candida panel, which will include the detection of Candida auris, is a direct-from-blood molecular diagnostic test designed to detect Candida species in just three to five hours, without the need to wait days for a positive blood clot. We believe the addition of Candida auris will strengthen the value proposition of our T2 Candida panel and lead to increased adoption. Candida auris is a multidrug-resistant fungal pathogen that has a mortality rate of up to 60% and is recognized as a serious global health threat by the CDC and the World Health Organization.

Speaker Change: The expanded T2 Candida panel, which will include the detection of Candida auris, is a direct-from-blood molecular diagnostic test designed to detect Candida species in just three to five hours, without the need to wait days for a positive blood culture.

Speaker Change: We believe the addition of Candida auris tests will strengthen the value proposition of our T2 Candida panel and lead to increased adoption.

Speaker Change: Candida auris is a multi-drug resistant fungal pathogen that has a mortality rate of up to 60% and is recognized as a serious global health threat by the CDC and the World Health Organization.

Trip Taylor: The CDC estimates the costs associated with U.S. Fungal diseases are as high as $48 billion annually and is called on public health professionals to help lower the burden of fungal disease by continuing to ease awareness of the lifesaving benefits of early detection and proper treatment. A 2022 Journal of Clinical Microbiology study conducted at the BMO-Bembino-Gazoo Hospital in Rome, Italy, found that pediatric patients suspected of fungal bloodstream infections that were tested with the T2 candidate panel received species identification results 121.8 hours faster compared to blood culture-based diagnostics.

John J. Sperzel: The CDC estimates the costs associated with U.S. fungal diseases are as high as $48 billion annually and has called on public health professionals to help lower the burden of fungal diseases by continuing to raise awareness of the life-saving benefits of early detection and proper treatment. A 2022 Journal of Clinical Microbiology study conducted at the Bambino-Gizou Hospital in Rome, Italy found that pediatric patients suspected of fungal bloodstream infections that were tested with the T2 Candida panel received species identification results 121.8 hours faster compared to blood culture-based diagnostics.

Speaker Change: The CDC estimates the costs associated with U.S. fungal diseases are as high as $48 billion annually and has called on public health professionals to help lower the burden of fungal disease by continuing to raise awareness of the life-saving benefits of early detection and proper treatment.

Speaker Change: A 2022 Journal of Clinical Microbiology study conducted at the Bambino Gesù Hospital in Rome, Italy, found that pediatric patients suspected of fungal bloodstream infections

Speaker Change: that were tested with the T2Candidate Panel received species identification results 121.8 hours faster compared to blood culture-based diagnostics.

Trip Taylor: Finally, we're also pursuing expanded claims for our FDA-clear T2 candidate panel and T2 bacteria panel to include pediatric testing. In December 2023, we submitted a 510(k) pre-market notification to the FDA to expand the use of the T2 candidate panel to include pediatric testing. And we expect to submit a 510(k) pre-mortification to the FDA to expand the use of the T2 bacteria panel to include pediatric testing during 2024.

John J. Sperzel: Finally, we're also pursuing expanded claims for our FDA-cleared T2 Candida panel and T2 Bacteria panel to include pediatric testing. In December 2023, we submitted a 510K premarket notification to the FDA to expand the use of the T2 Canada panel to include pediatric testing, and we expect to submit a 510K premarket notification to the FDA to expand the use of the T2 Bacteria panel to include pediatric testing in 20 With that, I'll now turn the call over to John Sprague to provide a detailed update on our first quarter financial results.

Speaker Change: Finally, we're also pursuing expanded claims for our FDA-cleared T2 Candida panel and T2 Bacteria panel to include pediatric testing.

Speaker Change: In December 2023, we submitted a $510,000 pre-market notification to the FDA to expand the use of the T2 Canada panel to include pediatric testing.

Speaker Change: And we expect to submit a 510k pre-market notification to the FDA to expand the use of the T2 bacteria panel to include pediatric testing during 2024.

John Sprague: With that, I'll now turn the call over to John Sprague to provide a detailed update on our first-quarter financial results. Thank you, John. Second quarter, 2024 revenues were $2 million, all from sepsis product sales. Sepsis test panel sales increased 27% compared to the prior year period and increased 12% compared to the first quarter of 2024, led by increased sepsis test sales offset by lower Internet national instrument sales. 2nd quarter, 2024, cost of product revenues were $2.7 million, a 45% increase, the decrease excuse me, compared to the prior year period, driven by increased sepsis test sales in lower international instrument sales. Research and development expenses were $3.4 million, a 13% decrease compared to the prior year period, driven by decreased clinical trial activities. Selling general administrative expenses were $5.5 million, a 13% decrease compared to the prior year period, driven by decreased head count spending.

Speaker Change: With that, I'll now turn the call over to John Sprague to provide a detailed update on our first quarter financial results.

John M. Sprague: Second quarter 2024 revenues were $2 million, all from Sepsis product sales. Sepsis test panel sales increased 27% compared to the prior year period and increased 12% compared to the first quarter of 2024, led by increased Sepsis test sales, offset by lower international instrument sales.

John M. Sprague: Thank you, John . Second quarter 2024 revenues were two million dollars, all from sepsis product sales.

John M. Sprague: Sepsis test panel sales increased 27 percent compared to the prior year period and increased 12 percent compared to the first quarter of 2024 led by increased sepsis test sales offset by lower international instrument sales.

John M. Sprague: Second quarter 2024 cost of product revenues were $2.7 million, a 45% increase compared to the prior year period, driven by increased sepsis test sales and lower international instrument sales. Research and development expenses were $3.4 million, a 13% decrease compared to the prior year period, driven by decreased clinical trial activity. Selling General Administrative Expenses were $5.5 million, a 13% decrease compared to the prior year period, driven by decreased headcount spending. The second quarter 2024 net loss was $9.2 million, $0.66 per share, compared to the prior year's second quarter net loss of $6.3 million, $7.84 per share.

John M. Sprague: Second quarter 2024 cost of product 5% decrease compared to the prior year period, driven by increased sepsis test sales and lower international instrument sales.

John M. Sprague: Research and development expenses were $3.4 million, a 13% decrease compared to the prior year period, driven by decreased clinical trial activities.

John M. Sprague: Selling General Administrative expenses were 5.5 million dollars, a 13% decrease compared to the prior year period, driven by decreased headcount spending.

John Sprague: The 2nd quarter, 2024 net loss was $9.2 million, 66 cents per share, compared to the prior year's second quarter net loss of $6.3 million, $7.84 cents per share. Cash and cash equivalents were $4.2 million as of June 30th, 2024, and we raised $7.3 million in net proceeds from a private placement stock sale in the quarter. The CRG debt conversion reduced our debt by almost 80% and interest expense by almost 70% compared to a year ago.

John M. Sprague: The second quarter 2024 net loss was $9.2 million, 66 cents per share, compared to the prior year's second quarter net loss of $6.3 million, $7.84 per share.

John M. Sprague: Cash and cash equivalents were $4.2 million as of June 30, 2024, and we raised $7.3 million in net proceeds from a private placement stock sale in the quarter. The CRG debt conversion reduced our debt by almost 80% and interest expense by almost 70% compared to a year ago. In 2024, we continue to expect total sepsis and related products revenues to grow between 49% and 64% to $10 to $11 million in 2023, and this target excludes any potential sales from our T2 BioThreat or T2 Lyme panels. Thank you, and back to John Sperzel for closing remarks.

John M. Sprague: Cash and cash equivalents were $4.2 million as of June 30, 2024, and we raised $7.3 million in net proceeds from a private placement stock sale in the quarter.

John M. Sprague: The CRG debt conversion reduced our debt by almost 80% and interest expense by almost 70% compared to a year ago.

John Sprague: In 2024, we continued to expect total sepsis and related products revenues to grow between 49 and 64% to $10 to $11 million over 2023, and this target excludes any potential sales from our T2 Bio Threat or T2 Line panels.

John M. Sprague: In 2024, we continue to expect total sepsis and related products revenues to grow between 49% and 64% to $10 to $11 million over 2023. And this target excludes any potential sales from our T2 BioThreat or T2 Lyme panels.

John Sperzel: Thank you, and back to John Spurzel for closing remarks. We are highly encouraged by the progress made in the 2nd quarter of 2024, including record sepsis test sales, significantly improving our balance sheet, materially improving our cost of product revenue, and reducing our operating expenses. Moving forward, we're excited by the potential to accelerate the growth of our sepsis business in the United States and internationally.

John M. Sprague: Thank you and back to John Sperzel for closing remarks.

John J. Sperzel: We are highly encouraged by the progress made in the second quarter of 2024, including record sepsis test sales, significantly improving our balance, materially improving our cost of product revenue, and reducing our operating expenses. Moving forward, we're excited by the potential to accelerate the growth of our sepsis business in the United States and internationally. We're also excited by the potential near-term catalyst, including the opportunity created by the Bee Blood Culture Media Bottle Shortage

John J. Sperzel: We are highly encouraged by the progress made in the second quarter of 2024, including record sepsis test sales.

John J. Sperzel: Significantly improving our balance sheet.

John J. Sperzel: materially improving our cost of product revenue and reducing our operating expenses.

Speaker Change: Moving forward, we're excited by the potential to accelerate the growth of our sepsis business in the United States and internationally.

John Sperzel: We're also excited by the potential near-term catalyst, including the opportunity created by the bee blood culture media bonus shortage, the US commercial launch of our T2 line panel with a detection of early line disease planned for the 3rd quarter of 2024, and the potential to establish a US commercial partnership for the distribution of our products with a multi-billion-dollar healthcare company. Our pipeline is also rich with potential catalysts that have already received FDA breakthrough device designation, including the US T2 resistance panel, which we plan to submit to the FDA for 15K clearance during the 4th quarter of 2024, and the expanded T2 candidate panel to include the detection of candidate oras.

Speaker Change: We're also excited by the potential near-term catalysts.

Speaker Change: including the opportunity created by the B. blood culture media bottle shortage.

John J. Sperzel: The U.S. commercial launch of our T2 Lyme panel for the detection of early Lyme disease, planned for the third quarter of 2024, and the potential to establish a U.S. commercial partnership for the distribution of our products by a multi-billion dollar healthcare Our pipeline is also rich with potential catalysts that have already received FDA breakthrough device designations, including the U.S. T2 Resistance Panel, which we plan to submit to the FDA for 510k clearance during the fourth quarter of 2024, and the expanded T2 Candida Panel to include the detection of candida auris. With that, I'd like to turn the call back over to the operator to open the line for questions. Operator? Thank you.

Speaker Change: The U.S. commercial launch of our T2 Lyme panel for the detection of early Lyme disease, planned for the third quarter of 2024.

Speaker Change: and the potential to establish a U.S. commercial partnership.

Speaker Change: for the distribution of our products with a multi-billion dollar healthcare company.

Speaker Change: Our pipeline is also rich with potential catalysts that have already received FDA breakthrough device designation.

Speaker Change: including the U.S. T2 Resistance Panel, which we plan to submit to the FDA for 510K clearance during the fourth quarter of 2024, and the expanded T2 Candida Panel to include the detection of Candida auris.

Operator: With that, I'd like to turn the call back over to the operator to open the line for questions. Operator? Thank you.

Speaker Change: With that, I'd like to turn the call back over to the operator to open the line for questions. Operator?

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key.

Operator: At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speak or equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, please press star one on your phone at this time if you wish to ask a question. And please hold while we pull for questions. And once again, it's Star One if you wish to ask a question on today's call.

Speaker Change: Thank you. At this time, we will be conducting a question and answer session.

Speaker Change: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, please press star 1 on your phone at this time if you wish to ask a question. And please hold while we poll for questions.

Operator: Once again, please press star 1 on your phone at this time if you wish to ask a question. And please hold while we poll for questions. And once again, it's star one if you wish to ask a question on today's call. The first question is coming from Kyle Mikson from Cunard. Kyle, your line is live. Hey guys, thanks for the questions.

Speaker Change: And once again, it's star one if you wish to ask a question on today's call. The first question is coming from Kyle Mikson from Cunard. Kyle, your line is live.

Kyle Mikson: The first question is coming from Kyle Mikson, from Canard. Kyle, your line is live. Hey guys, thanks for the questions. So I just wanted to talk the second half of the year how it looked when you were expecting there. So what are you seeing internationally in terms of like just the pipeline of the deals and orders and when you could place those instruments and also utilization of the Internet. Internationally, like could anything ramp up maybe like towards your end or something, and obviously you have guidance or full year, but how should we think about, you know, third quarter and fourth quarter as we kind of go ahead here and obviously like there's revenue as a component of that as well as margin.

Kyle Alexander Mikson: Hey guys, thanks for the questions. So, just wanted to talk about the second half of the year and what we were expecting there. So, what are you seeing internationally? In terms of like just the pipeline of the deals and orders and when you could place those instruments and also utilization internationally. Could anything ramp up maybe like towards year-end or something, and obviously, you have guidance or full year. But how should we think about, you know, third quarter and fourth quarter?

Speaker Change: Hey guys, thanks for the questions. So, just wanted to talk about the second half of the year, what we were expecting there, so what are you seeing internationally?

Kyle Alexander Mikson: in terms of like just the pipeline of deals and orders and when you could place those instruments and also utilization internationally. Like could anything ramp up maybe like towards year end or something? And obviously, you have guidance for a full year. But how should we think about, you know, third quarter and fourth quarter as we kind of go ahead here? And obviously, like there's revenue is a component of that as well as margin. So you could just maybe parse those out and help us think about that would be great.

Kyle Alexander Mikson: As we kind of go ahead here, and obviously, revenue is a component of that as well as margin. So you could just maybe parse those out and help us think about that would be great.

Kyle Mikson: So you can just be parsed those out and help us think about that would be great.

Kyle Mikson: Sure, Kyle. So, on the last call, I mentioned that the company was at an inflection point. And I continue to believe that, and I also believe that the progress that we made during the second quarter reflects that. To get to your questions in terms of our guidance. If you look at the guidance that we have given and reiterated both at the beginning of the year and at the end of the first and now at the end of the second quarter. We expected somewhere between 10 and 11 million dollars of product revenue, which is in the range of mid 40 to mid 50% growth year over year.

John J. Sperzel: On the last call, I mentioned that the company was at an inflection point, and I continue to believe that, and I also believe that the progress that we made during the second quarter reflects, to get to your questions in terms of our guidance. If you look at the guidance that we have given and reiterated, both at the beginning of the year and at the end of the first and now at the end of the second quarter, we expected somewhere between 10 and $11 million in product revenue, which is in the range of mid 40 to mid 50% growth year over year.

Kyle Alexander Mikson: Sure, Kyle.

Speaker Change: On the last call, I mentioned that the company was at an inflection point, and I continue to believe that, and I also believe that the progress that we made during the second quarter reflects that.

Speaker Change: to get to your questions in terms of our guidance.

Speaker Change: If you look at the guidance that we have given and reiterated, both at the beginning of the year and at the end of the first and now at the end of the second quarter, we expected somewhere between $10 and $11 million of product revenue.

Speaker Change: which is in the range of mid-40 to mid-50% growth year over year.

John Sperzel: And it was weighted approximately 40% in the first half of the year and 60% in the back half of the year. And we continue to believe that that is the appropriate mix first half versus second half.

John J. Sperzel: And it was weighted approximately 40% in the first half of the year and 60% in the back half of the year. And we continue to believe that that is the appropriate mix, first half versus second half. So we expect a very good second half of 2024, given all of that that I said.

Speaker Change: And it was weighted approximately 40% in the first half of the year and 60% in the back half of the year. And we continue to believe that that is the appropriate mix, first half versus second half. So we expect a very good second half of 2024, given all of that that I said.

John Sperzel: So we expect a very good second half of 2024 given all of that that I said. In terms of our international business, it continues to be strong. We continue to expand our distribution network in international markets. We added a number of countries during the second quarter. We expect to add additional territory exclusive distribution agreements in the second half of 2024.

John J. Sperzel: In terms of our international business, it continues to be strong. We continue to expand our distribution network in international markets. We added a number of countries during the second quarter. We expect to add additional territory-exclusive distribution agreements in the second half of 2024. When it comes to instruments, we had two instruments in the second quarter, which admittedly was lighter than we expected.

Speaker Change: In terms of our international business, it continues to be strong.

Speaker Change: We continue to expand our distribution network in international markets. We added a number of countries during the second quarter. We expect to add additional Territory Exclusive Distribution Agreements in the second half of 2024.

John Sperzel: When it comes to instruments, we had two instruments in the second quarter, which was lighter than we expected. We had a number that were close to the goal line at the end of June, which essentially rolled over into July. And I referenced in the prepared remarks, we already have six instruments sold in international markets, which will generate about $400,000 into three. As far as utilization is concerned, it's much more difficult to track utilization in international markets because we're selling through distributors. And it's a little more difficult to parse out what product might be in the pipeline and what product is in customers' hands and what product has been used.

Speaker Change: When it comes to instruments, we had two instruments in the second quarter, which admittedly was lighter than we expected.

John J. Sperzel: We had a number that were close to the goal line at the end of June, which essentially rolled over into July, and as I mentioned in the prepared remarks, we already have six instruments sold in international markets, which will generate about $400,000 in Q3. As far as utilization is concerned, it's much more difficult to track utilization in international markets because we're selling through distributors, and it's a little more difficult to parse out what product might be in the pipeline and what product is in customers.

Speaker Change: We had a number that were close to the goal line at the end of June , which essentially rolled over into July , and I referenced in the prepared remarks, we already have six instruments sold in international markets, which will generate about $400,000 in Q3.

Speaker Change: As far as utilization is concerned, it's much more difficult to track utilization in international markets because we're selling through distributors and it's a little more difficult to parse out what product might be in the pipeline and what product is in customers.

John J. Sperzel: hands, and what product has been used, and it's much easier to track that in the United States. In the United States, utilization continues to increase, and we continue to believe that all of our U.S. customers and customers that we have in the future would generate approximately $200,000 of annualized sepsis test revenue.

John Sperzel: And it's much easier to track that in the United States. In the United States, utilization continues to increase. And we continue to believe that all of our U.S. customers and customers that we have in the future could get to approximately $200,000 of annualized test revenue.

Speaker Change: hands and what product has been used. And it's much easier to track that in the United States. In the United States, utilization continues to increase.

Speaker Change: And we continue to believe that all of our U.S. customers and customers that we have in the future could get to approximately $200,000 of annualized infectious test revenue.

Kyle Mikson: Okay, thanks for all that.

Kyle Alexander Mikson: Okay, thanks for all that. And the partnership with the, I think it was a multi-billion dollar healthcare company. What are the financial implications of that? And when could that kind of come through?

John Sperzel: And the partnership with the, I think, with like multi-billion dollar healthcare company, what are the financial implications of that and when could that kind of come through? So like I'm just, for example, if that's a distributor, because that increase, I guess, like placement and stuff, or does that really not have to do with, you know, a consumable utilization, or is it something where maybe it's like a partnership that will actually boost, you know, pull through basically or something. And I'm just trying to think about how that's going to affect the model, you know, in years going forward.

Speaker Change: Okay, thanks for all that. And the partnership with the, I think with like multi-billion dollar health care company, what are the like the financial implications of that and when could that?

Kyle Alexander Mikson: Like I'm just, you know, for example, if that's a distributor, could that, you know, increase, I guess, like placements and stuff? Or does that really not have to do with, you know, consumables utilization? Or is it something where maybe it's like a partnership that will actually boost, you know, pull through basically or something? I'm just trying to think about how that's going to affect the model, you know, in years going forward.

Speaker Change: [inaudible]

Speaker Change: consumables utilization, or is it something where maybe it's like a partnership that will actually boost, pull through basically or something? I'm just trying to think about how that's going to affect the model in years going forward.

John Sperzel: So our objective with a US commercial partner, first of all, is to find the right one. The one that has presence across US hospitals, that has a physical presence in the locations within the hospital, and has scale. Because one of the things that we lack as a small diagnostic, particularly in the United States, is commercial scale. And so we have been working to address that, and we feel confident about the partner that we are negotiating that with. Obviously confident enough that we would mention it on this call.

John J. Sperzel: So our objective with a U.S. commercial partner, first of all, is to find the right one. The one that has a presence across U.S. hospitals, that has a physical presence in the right locations within the hospitals, and has scale.

Speaker Change: So our objective with a U.S. commercial partner, first of all, is to find the right one, the one that

Speaker Change: has presence across U.S. hospitals.

John J. Sperzel: Because one of the things that we lack as a small diagnostic company, particularly in the United States, is commercial scale. And so we have been working to address that. And we feel confident about the partner that we are negotiating that with, obviously confident enough that we would mention it on this call. As far as details about that potential agreement, Kyle, I can't get into that yet, but most certainly, once we have finalized that, that would be something that we would share with the market.

Speaker Change: that has a physical presence in the locations within the hospital.

Speaker Change: and HealthScale.

Speaker Change: Because one of the things that we lack as a small diagnostic company, particularly in the United States, is commercial scale.

Speaker Change: and so we have been working to address that and we feel confident about the partner that we are negotiating that with.

John Sperzel: As far as details about that potential agreement, Kyle, I can't get into that yet, but most certainly, once we have finalized that, that would be something that we would share with the market.

Speaker Change: obviously confident enough that we would mention it on this call. As far as details about that potential agreement, Kyle, I can't get into that yet, but most certainly once we have finalized that, that would be something that we would share with the market.

Kyle Mikson: Okay, in some of the studies that, yeah, sorry, go ahead. I said, we're certainly excited about it.

Kyle Alexander Mikson: Okay, internal studies, sir. Yeah, sorry, go on, go ahead.

John J. Sperzel: I said we're certainly excited.

Kyle Alexander Mikson: Okay, until the study is done.

Kyle Alexander Mikson: Yeah, sorry, go ahead.

Kyle Alexander Mikson: Okay, and then some of the studies that I guess were sort of, it sounds like a little delayed. Maybe some of the submissions were a little delayed. Is there any risk that those get further delayed, and how important was the timing of that? If you kind of think about how the milestones shape up for you going forward, or was timing kind of like not the most important thing this year?

Kyle Mikson: Okay, and then some of the studies that I guess were sort of, it sounds like a little delayed, maybe some of the submissions were a little delayed.

Kyle Alexander Mikson: I said we're certainly excited about it.

Kyle Alexander Mikson: Okay, and then some of the studies that I guess were sort of it sounds like a little delayed

Kyle Mikson: Is there any risk that would get further delayed, and how important was that timing of that? If you look, you know, if you kind of think about how the milestone to shape up for you, going forward, or was timing kind of like not the most, you know, important thing this year.

Kyle Alexander Mikson: Maybe some of the submissions were a little delayed. Is there any risk those get further delayed? And how important was that timing of that? If you kind of think about how the milestone is shaped up for you going forward, was timing kind of like not the most important thing this year?

Kyle Alexander Mikson: Were you talking about T2 Resistance, Kyle?

John Sperzel: Were you talking about teacher resistance, Kyle? Yeah, yeah, it also sounded like some of the technical studies, maybe you were a little bit either delayed or sort of like slower than expected, but you know, just I'll let you kind of take that. Sure, so let me just take the couple of things in our pipeline. Teacher line, those studies, on track, on time, and they're completed. The teacher resistance studies were delayed for one reason, and that was that we had a manufacturing issue that we had discussed with the market in the back half of 2023, which we have resolved.

Kyle Alexander Mikson: Yeah, yeah, it also sounded like some of the clinical studies maybe were a little bit either delayed or sort of like slower than expected, but you know, I'll just let you kind of take that.

Kyle Alexander Mikson: Were you talking about T2 Resistance, Kyle?

Kyle Alexander Mikson: Yeah yeah it also sounded like some of the clinical studies maybe were a little bit either delayed or sort of like slower than expected but you know just I'll let you kind of take that.

John J. Sperzel: Sure, so let me just take a couple things out of our pipeline. T2 Lyme, those studies are on track, on time, and they're completed. The T2-resistant studies were delayed for one reason, and that was that we had a manufacturing issue that we discussed with the market in the back half of 2023, which we have resolved. But that delay forced us to prioritize where we shipped the product that we actually made, again, for T2 resistance.

Kyle Alexander Mikson: Sure, so let me just take a couple things in our pipeline.

Speaker Change: T2 Lyme, those studies on track, on time, and they're completed.

Speaker Change: The T2-resistant studies were delayed for one reason, and that was that we had a manufacturing issue that we had discussed with the market in the back half of 2023, which we have resolved.

John Sperzel: But that delay forced us to prioritize where we shipped the product that we actually made, again, for teacher resistance. And we made the, I'd say obvious decision to supply our current customers in Europe, and not to supply ourselves so we could get those clinical studies done. Or sorry, the internal verification validation studies. So the field clinical studies for teacher resistance are completed. What's left are internal verification validation, and we have resumed those. It did, unfortunately, push our plan submission to FDA from Q3 of this year to Q4 of this year. Okay, got it. All right, that makes sense.

Speaker Change: But that delay

Speaker Change: forced us to prioritize where we shipped the product that we actually made, again, for T2 Resistance. And we made the, I'd say, obvious decision to supply our current customers in Europe .

John J. Sperzel: And we made the, I'd say, obvious decision to supply our current customers in Europe and not to supply ourselves so we could get those clinical studies done. So, or sorry, internal verification validation studies. So, the field clinical studies for T2 resistance are completed. What's left are internal verification validation, and we have resumed those. It did, unfortunately, push our planned submission to FDA from Q3 of this year to Q4 of this year.

Speaker Change: and not to supply ourselves so we could get those clinical studies done.

Speaker Change: or sorry, the Internal Verification Validation Studies.

Speaker Change: So, the field clinical studies for T2 resistance are completed. What's left are internal verification validation, and we have resumed those. It did, unfortunately, push our planned submission to FDA from Q3 of this year to Q4 of this year.

Kyle Alexander Mikson: Got it. All right, that makes sense. And then, you know, just kind of looking at the P&L and SG&A, it remains pretty, you know, relatively low compared to, you know, prior year levels and recent levels. Are you thinking about increasing Salesforce anytime soon or not?

Kyle Mikson: And then you know, we're just kind of looking at the P&O and SGNA remains pretty relatively low compared to like prior year level, levels and recent levels.

Speaker Change: Okay.

Speaker Change: Got it. All right, that makes sense.

Speaker Change: You know, just kind of looking at the P&L and SG&A, you know, it remains pretty, you know, relatively low compared to like, you know, prior year levels and recent levels. Are you thinking about, I guess, increasing Salesforce anytime soon or not?

John Sperzel: Are you thinking about, I guess, increasing sales force anytime soon or not? Absolutely not. In fact, we have reduced our sales force, particularly in the United States, not internationally, but we reduced it in the United States because we expected to have a US commercial partner. And what we have as our US sales team are people that we believe can effectively work with the partners that we're engaged with. So we haven't done it by happenstance; it's part of a plan strategy.

John J. Sperzel: Absolutely not. In fact, we have reduced our sales force, particularly in the United States, not internationally, but we reduced it in the United States because we expected to have a U.S. commercial partner, and what we have as our U.S. sales team are people that we believe can effectively work with the partners that we're engaged with. We haven't done it by happenstance; it's part of a planned strategy.

Speaker Change: Absolutely not. In fact, we have reduced our sales force.

Speaker Change: particularly in the United States, not internationally, but we reduced it in the United States.

Speaker Change: because we expected to have a U.S. commercial partner and what we have as our U.S. sales team are people that we believe can effectively work with the partner that we're that we're engaged with so

Speaker Change: We haven't done it by...

Speaker Change: Happenstance, it's part of a planned strategy.

Kyle Mikson: Okay, and then just a final question about the balance sheet.

Kyle Alexander Mikson: Okay, and then just a final question about the balance sheet, is there anything you could kind of share regarding moves that you'll maybe make in the second half of the year here, just to kind of shore up the balance sheet and just make sure you have enough for entering the 25th, you made some moves recently, but the cash position, you know, maybe it's not totally ideal. So maybe just like, you know, a little bit of a preview of anything to put in the model for us.

John Sperzel: Is there anything you could kind of share regarding like May, moves that you'll maybe make in the second half of the year here, just to kind of shore up the balance sheet and just make sure you have enough entering 25 feet. You know, you made some moves recently, but the cast position, maybe it's not totally ideal. So, maybe just like, you know, a little bit of like a preview, I guess, of anything to put in the model for us.

Speaker Change: Okay, and then a final question about the balance sheet. Is there anything you could kind of share?

Speaker Change: regarding moves that you'll maybe make in the second half of the year here, just to kind of shore up the balance sheet and just make sure you have enough entering. Twenty-five, you made some moves recently.

Speaker Change: But the cast position, maybe it's not totally ideal, so maybe just a little bit of a preview, I guess, of anything to put in the model for us.

John Sperzel: Kyle, what I could say about that, we obviously filed an S-3. We put an ATM in place. We obviously want to have the tools available in these markets. We also want to be smart about when we strengthen our balance sheet. We have a whole bunch of catalysts in front of us that I described, and partly in this Q&A, but also in the prepared remarks that we think are going to be excellent vehicles for us to strengthen our balance sheet around.

John J. Sperzel: Kyle, what I can say about that is that we obviously filed an S3, we put an ATM in place, and we obviously want to have the tools available. But in these markets, we also want to be smart about when we strengthen our balance sheet. We have a whole bunch of catalysts in front of us that I described, partly in this Q&A but also in the prepared remarks, that we think are going to be excellent vehicles for us to strengthen our balance sheet around.

Speaker Change: Kyle, what I could say about that, we obviously filed an S3, we put an ATM in place, we obviously want to have the tools available.

Speaker Change: In these markets, we also want to be smart about when we strengthen our balance sheet. We have a whole bunch of catalysts in front of us that I described.

Speaker Change: and partly in this Q&A but also in the prepared remarks that we think are going to be excellent vehicles for us to strengthen our balance sheet around.

Kyle Mikson: Perfect, I'll leave it there. Thanks guys, appreciate it. Thank you, Kyle.

Kyle Alexander Mikson: Perfect. I'll leave it there. Thanks, guys. I appreciate it.

Speaker Change: Perfect. I'll leave it there. Thanks, guys. Appreciate it.

Operator: There were no other questions in the queue at this time. I would now like to hand the call back to John Sperzel for closing remarks.

Operator: Thank you. There were no other questions in the queue at this time.

Speaker Change: Thank you, Kyle. Thank you, Kyle. Thank you. Thank you. There were no other questions in the queue at this time. I would now like to hand the call back to John Sperzel for closing remarks.

John Sperzel: I would now like to hand the call back to John Sperzel for close remarks. I would like to say thank you all very much for joining our 22 2024 earnings call, and we look forward to updating you as we progress through the back half of 2024.

John J. Sperzel: I would like to say thank you all very much for joining our Q2 2024 earnings call, and we look forward to updating you as we progress through the back half of 2024. Have a great day.

John J. Sperzel: I would like to say thank you all very much for joining our Q2 2024 earnings call, and we look forward to updating you as we progress through the back half of 2024. Have a great day.

Operator: Have a great day.

Operator: Thank you; this does conclude today's conference. You may disconnect your lines at the same time. Thank you for your part.

Operator: Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: Thank you. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.