T2 Biosystems to double sales force this year

By Len Zehr

T2 Biosystems (NASDAQ:TTOO), which entered 2015 with seven direct sales reps, plans to add another eight during the year as it continues to roll out its first products: the T2Candida panel and T2Dx instrument for the detection of Candida fungal infections that cause sepsis.

“Our focus is on closing 30 accounts this year within the top 450 hospitals in the U.S. that treat sepsis,” John McDonough, president and CEO, says in an interview with

Sepsis is one of the leading causes of death in the U.S., with a 30% mortality rate, of which Candida infections are the most lethal with a 40% mortality rate. The CDC has classified Candida as a “serious” threat due to antifungal drug resistance.

Sepsis also is the most expensive hospital-treated condition, with costs to the healthcare system exceeding $20-billion a year, according to the U.S. Department of Health and Human Services. In addition, sepsis accounts for an estimated 5.2% of all hospital costs.

Mr. McDonough explains that the T2Candida test uses magnetic resonance technology, known as T2MR, to help detect the presence of five clinically relevant species of Candida.

The test, which has a sensitivity to detect one-to-three cells in a milliliter of blood, is performed using a patient’s blood sample, with a result in three-to-five hours. That compares with two-to-five days or more with current diagnostic methods, involving a blood culture.

“That’s a 30 times faster result,” Mr. McDonough claims. “Studies have shown that if patients at-risk or suspected of having sepsis can get on a targeted therapy within 12 hours, there is the potential of a 50% reduction in mortality from sepsis and an annual savings of $12-billion to the healthcare system.”

Inadequate diagnosis of sepsis with a blood culture results in patients being bombarded with ineffective and unnecessary drugs, leading to a growing threat of anti-microbial resistance, he adds.

A study conducted by IMS Health and published in Future Microbiology last month, found that in a 500-bed hospital with an average of 5,100 symptomatic patients at high risk for developing a Candida infection, early detection with T2Candida could provide an annual cost savings of approximately $5.8-million and the prevention of 60% of Candida-related deaths.

Mr. McDonough estimates its $250-plus T2Candida test has an immediate market opportunity of 6.75 million high-risk patients, of which 1.35 million are diagnosed with sepsis. The top 450 hospitals see about one-third of all high-risk patients, he adds.

Some 40% of high-risk patients are given antifungal drugs before a species-specific diagnosis is made for sepsis, Mr. McDonough contends. “With our T2Candida test, only 2% to 3% of patients with Candida would receive antifungal drugs.”

In pivotal testing with 1,800 patients, T2Dx and the T2Candida demonstrated an overall sensitivity of 91.1% and overall specificity of 99.4%. That compares with a sensitivity of 50% to 60% with standard-of-care blood culture.

In addition, the mean time to a positive result for T2Candida was 4.4 hours, compared with 129 hours for blood culture and species identification, the current gold standard. The mean time for a negative result for T2Candida was 4.2 hours, compared with 120 hours for blood culture.

Both T2Dx and T2Candida were reviewed under the FDA de novo classification process for devices with low-to-moderate risk that are first-of-a-kind. FDA approval was granted last September in a record 117 days.

T2 is gearing up to begin clinical testing in the second half this year of a bacterial panel for sepsis infections. Mr. McDonough says there are some 405,000 ineffectively treated patients a year with bacterial infections that cause sepsis. The company hopes to launch the new panel in early 2017 at the same hospitals utilizing T2Candida.

“We figure there are potentially more than 500,000 patients ineffectively treated a year until a species-specific fungal or bacterial diagnosis is made,” he points out.

In 2016 and 2017, Mr. McDonough suggests that T2 will continue targeting accounts within and beyond the top 450 hospitals in the U.S. that treat sepsis. “Over time, our sales force should grow to 40-to-50 reps,” he adds.

In a bid to broaden its reach, the company is developing a T2HemoStat panel and new instrument that it hopes to move into pivotal testing next year, with a commercial launch slated for the second half of 2017.

“T2HemoStat is designed to assess the status of a trauma patient’s blood and collect data on things like clotting and bleeding,” Mr. McDonough says, adding that the initial addressable market is in excess of three million trauma patients a year.

The current standard of care for hemostasis diagnosis is now up to 24 hours but the T2Stat instrument and panel are designed to obtain a result in about 20 minutes, with as little as one finger-stick of blood, compared with a large volume of blood now needed with standard of care.

“Like T2Candida, T2HemoStat has the potential to reduce mortality rates among trauma patients and significantly increase savings for hospitals,” Mr. McDonough contends.

Earlier this year, T2 teamed up with Canon USA to develop a sensitive and rapid diagnostic panel utilizing the existing T2MR platform for the detection of Lyme disease.

Mr. McDonough explains that there are three bacteria groups that cause Lyme disease. None of bugs grow very well in blood culture and even after 21 days, 90% of infections are missed.

According to the CDC, Lyme disease has an estimated incidence of 360,000 a year in the U.S., with only 30,000 patients diagnosed. Studies have shown that delay in therapy can significantly increase the incidence of chronic joint inflammation, neurological disorders and cognitive defects.

“Same as sepsis, blood culture and serology methods are not sensitive and take too long,” Mr. McDonough contends. “The sensitive of our T2MR technology could be a breakthrough in rapidly identifying patients.”

Leerink Partners analyst, Dan Leonard, wrote in March that the Canon collaboration represents an “endorsement of the technology’s capability, and we expect additional agreements to follow.”

Mr. Leonard upgraded T2 to “outperform” in March, with a target price of $23. The stock closed at $15.86 on Friday.