T2 Biosystems Announces Restructuring of CRG Term Loan Agreement
Extends Interest-Only Payment Period Through December 2021 and Reduces Minimum Revenue Targets
LEXINGTON, Mass., Sept. 10, 2019 (GLOBE NEWSWIRE) -- T2 Biosystems, Inc. (NASDAQ:TTOO), a leader in the development of innovative diagnostic products for critical unmet needs in healthcare, announced today that it has restructured its Term Loan Agreement with CRG Servicing LLC (“CRG”).
The key updates of the restructured CRG agreement include:
- Extending the interest-only payment period by one year so that principal payments will commence beginning in March 2022 instead of March 2021.
- Reducing the minimum revenue targets for 2019 – 2022 to levels that are below the Company’s current financial forecast. For any shortfall to achieving the minimum revenue targets, the Company has the right to pay double the amount of any shortfall as an acceleration of principal payments (unchanged from existing structure).
“We continue to be excited by the potential of T2 Biosystems’ direct-from-blood diagnostic technology for the prevention of sepsis and antibacterial resistance, along with future applications under development,” said Luke Düster, partner of CRG. “We are pleased to extend our partnership and financial support of the Company as they continue to drive increased adoption and utilization of T2Bacteria and we are encouraged by the Company’s progress, including recent developments supporting commercial momentum and pipeline expansion.”
“The restructuring of our term loan agreement with CRG is an important financial update that provides increased balance sheet flexibility and supports our ability to execute on our growth strategy,” said John McDonough, chairman and chief executive officer at T2 Biosystems. “We believe the updated agreement provides sufficient runway to continue driving adoption of T2Bacteria and T2Candida in the near-term, while also executing on our development pipeline to further expand our market opportunity. We are pleased with ongoing support from CRG and for their collaborative partnership.”
In connection with the restructuring of the Term Loan Agreement, the Company issued to CRG additional warrants to purchase a total of 568,291 shares of the Company’s common stock. The warrants are exercisable any time prior to September 9, 2029 at a price of $1.55 per share. The Company also reduced the exercise price of the warrants previously issued to CRG to purchase an aggregate of 528,958 shares of common stock to $1.55 at any time prior to December 30, 2026.
About T2 Biosystems
T2 Biosystems, a leader in the development and commercialization of innovative medical diagnostic products for critical unmet needs in healthcare, is dedicated to improving patient care and reducing the cost of care by helping clinicians effectively treat patients faster than ever before. T2 Biosystems’ products include the T2Dx® Instrument, T2Candida® Panel, and T2Bacteria® Panel, which was recently announced as the first and only in-vitro diagnostic test to receive approval for a New Technology Add-on Payment (NTAP) by CMS, are powered by the proprietary T2 Magnetic Resonance (T2MR®) technology. T2 Biosystems has an active pipeline of future products, including products for the detection of additional species and antibiotic resistance markers of sepsis pathogens, and tests for Lyme disease.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding additional patients, timing of testing patients, anticipated product benefits, strategic priorities, product expansion or opportunities, growth expectations or targets, timing of FDA filings or clearances and anticipated operating expenses, as well as statements that include the words “expect,” “intend,” “plan”, “believe”, “project”, “forecast”, “estimate,” “may,” “should,” “anticipate,” and similar statements of a future or forward looking nature. These forward-looking statements are based on management's current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, (i) any inability to (a) realize anticipated benefits from commitments, contracts or products; (b) successfully execute strategic priorities; (c) bring products to market; (d) expand product usage or adoption; (e) obtain customer testimonials; (f) accurately predict growth assumptions; (g) realize anticipated revenues; (h) incur expected levels of operating expenses; or (i) increase the number of high-risk patients at customer facilities; (ii) failure of early data to predict eventual outcomes; (iii) failure to make or obtain anticipated FDA filings or clearances within expected time frames or at all; or (iv) the factors discussed under Item 1A. "Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 31, 2018, filed with the U.S. Securities and Exchange Commission, or SEC, on March 14, 2019, and other filings the company makes with the SEC from time to time. These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management's estimates as of the date of this press release. While the company may elect to update such forward-looking statements at some point in the future, unless required by law, it disclaims any obligation to do so, even if subsequent events cause its views to change. Thus, no one should assume that the Company’s silence over time means that actual events are bearing out as expressed or implied in such forward-looking statements. These forward-looking statements should not be relied upon as representing the company's views as of any date subsequent to the date of this press release.
Gina Kent, Vault Communications
Zack Kubow, W2O Group