T2 Biosystems Stock Tumbles: Company Lays Off 30% Of Workforce, Clocks 70% Decline In Q1 Revenues

T2 Biosystems Inc TTOO has initiated a process to explore a range of strategic alternatives and a restructuring plan, including a reduction in force.

The company has engaged an advisory firm to explore all potential strategic alternatives.

The restructuring program is designed to reduce annual operating costs and includes, among other things, an incremental reduction of nearly 30% of the company's workforce completed this past week.

Concurrently, the company submitted a 510(k) premarket notification to the FDA for its T2Biothreat Panel. 

The FDA submission follows the recently completed U.S. clinical evaluation that demonstrated very high sensitivity and specificity and included 350 contrived positive samples and over 470 negative blood samples from healthy and febrile subjects.

The T2Biothreat Panel is a fully-automated, direct-from-blood test designed to run on the FDA-cleared T2Dx Instrument and simultaneously detects six biothreat pathogens identified as threats by the U.S. Centers for Disease Control and Prevention.

T2 Biosystems reported Q1 FY23 sales of $2.1 million, a 71% Y/Y decrease, missing the consensus of $2.33 million.

Lower sales were driven by a decline in COVID-19 test sales and reduced BARDA activities. 

The company reported an EPS loss of 1.32 down from $4.86 loss a year ago, missing the consensus of a $1.20 loss.

Guidance: T2 Biosystem reiterates its FY23 guidance and expects total sepsis and related product revenue of $11-$13 million, representing growth of 31%-55%.

Given the focus on product revenue, the company is not providing guidance on research and contribution revenue.

Price Action: TTOO shares are down 37.4% at $0.18 on the last check Tuesday.