T2 Biosystems Inc (TTOO) 2018 Q2 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the T2 Biosystems 2018 Second Quarter Financial Results Conference Call. (Operator Instructions) It is now my pleasure to turn the call over to Zack Kubow of the W2O Group. Please go ahead, sir.

Thank you, operator, and good afternoon, everyone. Thanks for joining us for the T2 Biosystems 2018 Second Quarter Financial Results Conference Call.

On the call to discuss the results and operational highlights for the quarter ended June 30, 2018, are President and CEO, John McDonough; and Chief Financial Officer, John Sprague. The executive team will open the call with some prepared remarks, followed by a question-and-answer period. I would 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 those statements, including the risks and uncertainties described in T2 Biosystems' annual report on Form 10-K filed with the SEC on March 19, 2018, and other filings the company makes with the SEC from time to time. The company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.

With that, I'd like to turn the call over to President and CEO, John McDonough. Good afternoon, John.

Thank you, Zack. Good afternoon, everyone, and thank you for joining us as we discuss the progress, results and outlook following our 2018 second quarter.

The highlight of the second quarter was the FDA clearance of the T2Bacteria Panel announced on May 29, setting the stage for what we believe to be the most important product launch to date at T2 Biosystems. While we've been working towards this goal for years, in many ways, achieving this clearance is like a new start here at the company, and everyone is energized to support the launch.

T2Bacteria is the first and only FDA cleared test to identify sepsis causing bacteria directly from whole blood. Combined with the T2Candida Panel, our T2Direct Diagnostics offering is now uniquely positioned in what we believe will become a must-have technology to significantly enhance existing sepsis protocol, to deliver better patient outcome and reduce health care spending on this often preventable condition.

Our vision, and that of many users, is that our products will eventually allow for a new protocol and revised standards for addressing patients at risk of sepsis. And while other technologies will play some role in the fight against infections, no technology available today can come close to the speed and accuracy of our platform for detecting the most critical information that can enable targeted and effective therapy.

In short, we believe the time will come in the not-so-distant future when it will be simply irresponsible to rely solely on blood culture-based protocol and probability-based trial and error medicine for one of the most deadly conditions in the hospital.

We were pleased in June to raise $52.6 million in gross proceeds from an equity offering, providing additional capital to support the launch and execute on our other strategic initiatives. With that said, I am pleased to report that the T2Bacteria launch is progressing as planned, and the early feedback has been highly encouraging. I will provide some more color on the launch in a moment. But first, I will provide a high-level summary of key financial results and commercial metrics for the quarter. After my remarks, I'll pass the call to our CFO, John Sprague, who will provide a detailed financial review, including a recap of our full year guidance.

In the second quarter, we reported total revenues of $3.9 million and product revenue of over $1.2 million. Both revenue levels met or exceeded our guidance and more importantly reflect solid trends in commercial activity, predominantly based on activity before the T2Bacteria clearance and launch. Overall, product revenue grew 71% for the second quarter of 2017, driven by growing sales of the T2Candida Panel and the T2Dx Instrument. This included increased T2Candida usage on a same-store basis over last quarter, a positive sign that utilization is growing over time.

We also delivered encouraging results across the key commercial metrics that we measured to evaluate the health and outlook of our business. During the second quarter, we continued to build momentum with new instrument contracts, securing 10 contracts for the placement of 9 T2Dx Instruments, ahead of our guidance for 6 new contracts and 8 new instrument placements during the quarter. This will provide an estimated over 45,000 high-risk patient with access to a T2Dx, ahead of our target of growing by 35,000 patients in the quarter.

In addition, we had another strong quarter building our sales pipeline, reflected by the sustained increase in new proposals delivered over the past 3 quarters, leading into the FDA clearance for T2Bacteria. In the United States, we delivered 20 proposals on the second quarter, following 17 delivered in Q1 and 24 delivered in Q4, which is 2 to 3x higher than the average number of proposals delivered per quarter earlier in 2017. To date, 9 of these proposals have turned into signed contracts, and all of the other hospitals that received proposals remain actively engaged.

As of June 30, 2018, we have 73 instruments placed or contracted to be placed, covering 158 hospitals in the United States and worldwide. We estimate that each instrument in the U.S. may generate approximately $300,000 in recurring revenue every year once hospitals go live and ramp up testing of patients with T2Bacteria and T2Candida, which could take 12 to 18 months.

Let's turn now to discuss the launch of T2Bacteria. We're off to a strong start, and it's clear that the market has been eagerly awaiting the availability of T2Bacteria. Our sales reps have been actively engaging with our existing customers, targeted hospitals and responding to inbound interests. Compared to our prior experience with the launch of T2Candida, there's an elevated level of excitement and urgency, and we're confident that this will be a tremendous catalyst for our business.

We entered the launch with a 20-person U.S. sales organization that includes 12 sales representatives, and we plan to add about 4 new reps by the end of the year. It is important to note that we still assume the sales cycle for new hospitals will be in the range of 6 to 12 months and then it will take another 3 to 6 months for hospitals to take delivery, calibrate, train and begin utilization of the platform. This is typical of all other new diagnostic platform.

Shortly after receiving FDA clearance, we attended the American Society of Microbiology, or ASM Microbe conference, on June 7 to 11. ASM Microbe is one of our largest customer meetings of the year and it provided an excellent opportunity to raise awareness of the T2Bacteria Panel as a significant new addition to the T2Direct Diagnostics offering for the identification of sepsis-causing pathogens directly from whole blood in 3 to 5 hours. We had a strong in-booth presence, featuring key opinion leader presentations and our new marketing materials. This was complemented by late-breaker posters and data presented on the T2Bacteria Panel, highlighting its accuracy and speed. The first U.S. presentation of the T2Bacteria pivotal clinical trial data was presented at ASM, covering a large study of over 1,400 patient samples, collected across 11 hospital and hospital systems across the United States. We've discussed the strong accuracy data from the study in others in the past, but I want to highlight a couple of additional results presented by the investigators.

T2Bacteria provided results more than 2.5 days faster than blood culture species identification and detected 69 patient bloodstream infections that were not detected by the concurrent blood culture. More than 68% of patients in the clinical trial with a bloodstream infection confirmed by both T2Bacteria and blood culture could have benefited from earlier appropriate antibiotics based on the rapid T2Bacteria results. T2Bacteria also had a noted advantage in detecting infected patients on antibiotics who were missed by the concurrent blood culture. These are meaningful differences in speed and levels of detection, which is part of our core messaging that the combination of T2Bacteria and T2Candida can positively impact patient lives by allowing a faster and a more targeted therapeutic approach to treating patients while potentially saving institutions millions of dollars each year. We believe this is resonating in the marketplace and are encouraged by the interest from potential customers that we have targeted for the launch and from new inbound interests generated at ASM and through other channels.

In addition to the data presented at ASM, we also saw continued growth in the number of published studies supporting our technology platform. This included 5 studies on T2Candida and 1 on the T2Candida Panel published by the CDC. One of these studies was a recently published case study from Spain that details how the T2Candida Panel contributed to the healthy discharge of a 1-year-old transplant patient suspected of having sepsis by providing infection results earlier than blood culture and leading to more targeted antifungal therapy. The cadence of peer-reviewed journal articles on T2Candida serves as a valuable proof point for our technology platform and the T2Bacteria Panel.

Overall, our commercial team is off to a great start with the launch of T2Bacteria, and we are proud to be changing the clinical conversation and the economic equation as it relates to sepsis prevention and management.

Before turning the call over to John Sprague for the details of our Q2 financial performance, I'd like to provide a brief update on our pipeline and development efforts.

In May, we enrolled the first patient in our FDA clinical trial for the T2Lyme diagnostic panel. The study will evaluate the clinical performance of T2Lyme compared to skin biopsy and/or detection of the C6 antigen. We expect this clinical trial to continue into 2019, which may enable us to make a submission to the FDA sometime next year.

We estimate the size of the T2Lyme market to be $700 million, and we believe we can make a difference in detecting this growing disease by directly detecting the bacteria that enters the bloodstream from a tick bite.

The T2 Gram-Negative Resistance diagnostic panel being developed through a partnership by Allergan remains on track for delivery of initial products to Allergen by the end of this calendar year. In the future, this product could be used to determine if a patient is resistant to the first-line therapy associated with certain deadly gram-negative bacterial infection.

The initial development efforts of our expanded T2Bacteria Panel are underway as part of our collaboration with CARB-X. The new test aims to address the most serious superbugs and resistance genes on the antibiotic-resistance threat list published by the CDC. The test delivered by T2 Biosystems will aim to identify 20 or more additional infectious species and resistance genes directly from whole blood beyond T2Bacteria and T2Candida.

With that, let me turn the call over to John Sprague, who will review our second quarter 2018 financial results in greater detail. John?

Thank you, John.

Second quarter 2018 total revenue of $3.9 million exceeded the high end of guidance by 18% and increased 70% over last quarter's revenues of $2.3 million and 290% over last year's second quarter revenues of $1 million.

Product revenues, primarily T2Candida Panel and T2Dx Instrument sales, of $1.2 million were above the mid-range of guidance, a 20% increase over last quarter's product revenues of $1 million and a 71% increase over last year's second quarter product revenues of $0.7 million.

Research revenues were $2.7 million compared to $1.3 million last quarter and $0.2 million in last year's second quarter. Research revenues included a onetime $1.3 million milestone payment from our partnership with Canon.

Costs and expenses, excluding cost of product revenue, were $11.4 million compared to $10.5 million last quarter and $12.9 million in last year's second quarter and include depreciation and noncash stock compensation from stock options and restricted stock unit, or RSU, grants. Noncash depreciation and stock compensation expense was $4 million compared to $1.7 million last quarter and $1.8 million in last year's second quarter and increased primarily due to the vesting of performance-based RSUs.

Operating margins were a loss of $10.9 million compared to a loss of $11.4 million last quarter and a loss of $13.9 million in last year's second quarter. Net interest expense and other nonoperating expenses were $1.4 million compared to $1.5 million last quarter and $1.6 million in last year's second quarter.

Our net loss was $12.3 million, $0.32 per share compared to a net loss last quarter of $12.9 million, $0.36 per share and net loss in last year's second quarter of $15.5 million, $0.50 per share.

Weighted average shares outstanding were 38.3 million compared with 36 million last quarter and 30.7 million in last year's second quarter.

Our cash and cash equivalents were $70.7 million at June 30, 2018. As John mentioned, in June, we raised $52.6 million gross proceeds from an equity offering.

We believe our cash and financing sources are sufficient through at least the first half of 2020, providing sufficient runway to demonstrate that the new T2Direct Diagnostics offering has changed the commercial trajectory of the company.

First half 2018 total revenue was $6.2 million, an increase of 226% over last year's first half revenues of $1.9 million. Product revenues, primarily T2Candida Panel and T2Dx Instrument sales, were $2.3 million, a 64% increase over last year's first half product revenues of $1.4 million.

Research revenues were $4 million compared to $0.5 million in last year's first half. Research revenues included a onetime $1.3 million milestone payment from our partnership with Canon.

First half 2018 cost expenses, excluding cost of product revenue, were $21.8 million compared to $25.3 million in last year's first half and include noncash depreciation and stock compensation from stock options and RSUs. Noncash depreciation and stock compensation expense was $6.2 million compared to $3.4 million in last year's first half and increased primarily due to the vesting of performance-based RSUs.

Operating margins were a loss of $22.3 million compared with a loss of $27.1 million in last year's first half. Net interest expense and other nonoperating expenses were $2.9 million compared to $3.1 million in last year's first half. Our net loss was $25.2 million, $0.68 per share compared to a net loss of $30.2 million, $0.99 per share in last year's first half.

Weighted average shares outstanding were 37.1 million compared to 30.6 million in last year's first half.

Second half 2018 outlook. The following forward-looking statements reflect estimates based on information as of August 2, 2018, and are subject to uncertainty. We reaffirm our guidance presented on our May 29, 2018 conference call, and we are increasing the low end of the range for this year's expected revenue. We expect 2018 revenue to be $10.5 million to $12 million, up from the previous guidance of $10 million to $12 million. Product revenue is expected to be in the range of $5 million to $5.9 million, up from the previous range of $4.5 million to $5.9 million. Research revenue is expected to be in the range of $5.5 million to $6.1 million.

We expect revenue to at least double in each of 2019 and 2020 as more accounts go live and are testing with T2Bacteria. We'll achieve total revenue in 2020 in the range of at least $50 million. In the second half of 2018, we expect closed contracts and a placement of 20 to 25 instruments, with approximately 70% of these instruments to be placed in the United States. We expect that these placements will provide access to at least 75,000 patients suspected of sepsis. The number of high-risk patients is important as it represents the current existing market opportunity for the T2Candida and T2Bacteria Panels if every patient at hospitals under contract were tested at time they showed symptoms of infection. However, this metric is becoming increasingly difficult to accurately track and report and ultimately will become less meaningful as we expand our installed base and drive adoption into this high-risk population, which will be reflected in our utilization and recurring T2Bacteria and T2Candida Panel sales. Therefore, we'll likely discontinue this metric after reporting results for the fourth quarter and full year 2018.

As John mentioned, it typically takes the instrument placements on average of 3 to 6 months to go live, and patient testing commences as hospitals are require to validate any new diagnostic tests and instruments.

During this period, the company typically receives nominal revenue, unless the instrument has been purchased by the hospital, which in the United States occurs about 15% of the time. International distributors typically purchase instruments at a 30% discount off the list price $100,000 per instrument. We expect the average sales price for T2Bacteria Panel to be $150 and for T2Candida Panel to hold at $200 per test. International distributors typically receive about a 30% discount.

We estimate that a single T2Dx Instrument is capable of running about 3,000 tests per year. Over time, as patient testing grows in the hospital, we expect each T2Dx Instrument to generate about $300,000 in annual revenue from the combination of T2Bacteria and T2Candida testing. We expect quarterly operating expenses to stay in the range of $10.8 million to $11.8 million per quarter in the second half of 2018, including noncash depreciation and stock-based compensation of approximately $2 million each quarter and noncash stock-based compensation from performance-based RSUs of $0.8 million each quarter. Noncash stock-based compensation expenses may be impacted by the timing of performance-based RSU vesting.

We estimate that we'll achieve cash flow breakeven between $65 million and $75 million in annual revenue. We expect our gross margins to be approximately 45% to 50% at these revenue levels. Our weighted average shares outstanding of 38.3 million may be impacted by stock option exercises.

Thank you, and back to John McDonough, for closing remarks.

Thank you, John. In summary, we continue to make commercial progress and are encouraged by the initial feedback from the rollout of the T2Bacteria launch. We expect the launch will drive increased instrument placements in the second half of 2018 with momentum continuing to build in 2019 and beyond as our installed base continues to grow and we drive higher volumes of recurring testing revenue.

We remain confident that this will allow us to at least double our revenue in each of the next 2 to 3 full years.

I'd like to thank the fund managers and analysts that participated in our recent financing. We are working hard and smart to make sure that your confidence pays off.

We continue to expect the T2MR breakthrough, the 1-day [DC] is one of the most important developments in fighting infectious disease and making sepsis infection far less lethal, resulting in far more patients being discharged and walking out of the hospital.

Thank you for your participation in today's call and for your continued interest in T2 Biosystems. That concludes our prepared remarks for this evening. Operator, we'll now open the call for questions.

(Operator Instructions) And our first question comes from Puneet Souda with Leerink Partners.

So I hope to understand, in the quarter, did you see a pick up here in any of the ER accounts? Are there certain accounts, specifically in the microbiology labs, that picked up? Just give us -- help us understand, was there more confidence among the customers now that -- now with the approval in hand? And I have a follow-up.

Yes, you bet. So there's no question, there's a lot more confidence among customers now that the T2Bacteria product is cleared. I think it's safe to say that in over 90% of the accounts that are kind of in the pipeline that can close here in the next 6 months is really being driven by T2Bacteria. And about 70% of the T2Bacteria interest is really being driven by initial use in the emergency department. So we're really encouraged. Obviously, it's early in the launch, but we're encouraged with the development of the pipeline. We're encouraged with the interest. We had a national sales meeting here at our headquarters last week. And all the data that came out of that through territory reviews and training and the like gave us a lot of optimism as we enter the second half of the year.

Okay, great. And in terms of the menu. What's been the feedback for the T2Bacteria menu versus the current blood culture products from some of the customers? Could you elaborate on that?

Yes. I mean, there's strong acceptance to the menu. There's a good understanding that these pathogens are the ones that typically are not covered by broad-spectrum antibiotic drugs and that there's real opportunities here to get more patients on targeted therapy days faster than what's happening today and also opportunities with negative test results to deescalate drugs that patients are being treated with.

Okay. And in terms of T2Candida versus Bacteria longer term, how should we think about the mix? As we go into 2019 and 2020, where you talked about doubling the revenue, how should we think about the mix here longer term?

Yes. T2Candida revenue, we believe, will continue to grow on a cadence kind of comparable to what it is we've been seeing. And as we get into 2019 specifically, Bacteria at some point during that year probably overtakes T2Candida in total sales. But Candida has continued to grow. So it might take a couple of quarters for that to play itself out. But Bacteria, without a doubt, will be the flagship product of the company. The good news is that adoption being driven by Bacteria will pull along T2Candida usage, we believe, in most of the accounts that closed as well.

Our next question comes from Patrick Donnelly with Goldman Sachs.

Obviously, a big change with Bacteria not only commercially, but makes you more attractive to partner with biopharma and other potential collaborators. Can you just talk about the pace of conversations with pharma partners? Is that accelerated with Bacteria online and just the outlook there in general over the next year or 2?

Yes, it's definitely accelerated. It's opened up opportunities since there's more antibiotics in development than antifungal. So there's definitely new opportunities emerging. And it's tough to say. I mean, I would definitely expect to see a set of collaborations in that range, but it's tough to predict what that impact will be at this early stage.

Okay. And then definitely appreciate the color on the longer sales cycle with diagnostic products. But you guys have talked about seeing a significant uptick in usage and revenue, call it, 2 quarters after the approval. Could you just talk about your expectations there? Any change since the approval has been granted in late May? And then just the early feedback, has that impacted your expectations at all?

Yes. It has -- now it's confirmed our expectations. And it's still early. But no, we would expect Q3 -- we would expect to see an uptick, especially in the United States with closing accounts. And that would turn into revenue commencing in any meaningful way in Q4 and Q1, and that's consistent with what our expectation has been.

Our next question comes from Soumit Roy with JonesTrading.

Just to understand, is there any progress made towards making any protocol change for the hospitals to incorporate -- make this, like you mentioned, it would be irresponsible not to use this. So has there been any move in that part?

We're definitely engaged in early discussions in that regard. And I would say most of the accounts that are deep in the pipeline, those discussions are occurring. But it's really early. Our expectation is that in all likelihood when the product is adopted, the internal protocol probably would be not significantly modified. They're going to probably roll it out in the emergency department and perhaps change protocols there, and then over time, getting better than the protocol as the impact of the product is really better appreciated and understood within the hospital.

Do you have any like a time line in mind how long these things -- process takes for a protocol...

Yes. I'd rather -- we definitely have a time line in mind, but I'd rather get a little bit more information under our belts before we start talking about specific time lines.

(Operator Instructions) And our next question comes from Mark Massaro with Canaccord Genuity.

This is Max Masucci on for Mark. I know it's hard to comment beyond 2018. But post-Bacteria approval, you've set a goal to double your revenues in '19 and '20. This contemplates roughly $20 million to $24 million in '19 and $40 million to $48 million in '20 versus your at least $50 million on this call. I know it's a small $2 million delta, but is there any reason to think that these expectations have changed given what appears to be strong early traction?

No. The expectations are the same. You're right, we go to $24 million to $48 million. We had stated when we gave that guidance -- the same guidance, we had said we expected a doubling and to get to $50 million by 2020. So we're not changing those out-year guidance. And so really we're guiding to slightly better than doubling over the next 2 years.

Okay, great. And we saw a nice progress in proposals at 20 in the quarter. Does that number reflect a large bolus of customers that are excited about Bacteria? I'd just love to get a sense of the pacing and how quickly you think they can be converted.

Yes. It definitely -- the increase is driven by Bacteria. There's no question about that. We believe we will convert the number of -- hopefully a significant number of these proposals this quarter as that would keep us on the track to get to the 20 to 25 instrument placements in the second half of the year. And over time, we believe that we will close a majority of the proposals that ultimately go out the door.

Great. And then one more if I can. We appreciate the full year guide. We'd love to better understand the pacing of revenues in the back half of the year. Is it reasonable to think that Q4 revenues might trend above Q3?

Yes, I think that's a really safe bet. We would expect to see more of a contribution from T2Bacteria in Q4 than Q3 specifically and to continue to see the kind of quarter-over-quarter growth we've seen in T2Candida. So for sure, we'd expect to see an uptick from Q3 to Q4.

Our next question comes from Paul Knight with Janney Montgomery.

John, could you kind of outline your -- the Canon collaboration was a $1.3 million milestone. What was that milestone for? And then kind of again go over the Lyme time line.

Yes. So the milestone was related to entering the FDA pivotal trial, which was -- took place in May, and that triggered the milestone payment from Canon, the actual payment was slightly larger than the revenue recognized. And that just gets into revenue recognition stuff which I'll try not to figure out. And that in terms of where we're at with Lyme, we commenced the pivotal trial in May. We expect that pivotal trial to go through the 2019 Lyme season. And we're hopeful to get to an FDA submission in 2019, likely in the back half of the year.

Okay. And then regarding Bacteria, you do see -- your product guidance is up a bit. You do see some Lyme sales. Is it test or instruments from Bacteria -- sorry, in 3Q and 4Q this year?

Yes. So in 4Q -- in Q3, we would expect to see a nominal amount of Bacteria disposable sales and a bigger uptick in the fourth quarter. In the instrument sales, we continue to say we expect about 85% of the instrument placements in the U.S. to be reagent rentals. As we look at the pipeline, it's trending a little better than that from a pipeline standpoint, but not enough to want to change that expectation. But the uptick we expect to see in instrument placements in the second half of the year is primarily being driven by T2Bacteria. So the instrument sales, the placements on reagent rentals, I think it's safe to say certainly in the U.S. probably 90% of those placements are being driven by interest in T2Bacteria. Outside the U.S., it's probably more of a 50-50 proposition.

Our next question comes from Yi Chen with H.C. Wainwright.

This is Julian on for Yi. Just on the Ochsner medical systems [beyond] T2Bacteria Panel were up, impressive to say the least. Any early thoughts on why sensitivity was much higher in this study compared to the pivotal trial?

It would be speculation. So it's always tough to know what's driving it. But the study at Ochsner was exclusively, as I understand it, being driven by screening patient suspected of sepsis, where in the pivotal trial, you had a mix of patients who were suspected of sepsis or perhaps have been -- as much as a couple of days into the sepsis protocol. And so the sensitivity could have been impacted for reasons of that type. But having said that, even with T2Candida, we typically see sensitivities that range to almost always north of 90%. Sometimes, you get really high in the 90s, sometimes you get lower. And it's tough to know what the factors are that actually drive that.

(inaudible)

I'm sorry, you're breaking up a little better, so we can't quite hear the question.

Sure, sure. Can you hear me now?

Yes.

My question is just when are you guys (inaudible) interesting in entering ICU setting with the T2Bacteria Panel?

We would expect to be in the ICU setting right away. About -- I mean, the 2 primary drivers in a hospital, and there are more, but it's primarily the emergency department and then the ICU. And so many of these accounts initially are going to be launching in the ICU.

Our next question comes from Steve Brozak with WBB.

The way we model this with T2 is that there are 3 parts to what you're doing in terms of adding the bacterial panel to the fungal panel. The first part involves the hospital system. So what I'd like to ask is with the hospital systems, with the clinicians and eventually with the patients and in terms of their not just outcomes but their general experience, it's too early to ask about that. But what can you tell us in as much color about the hospital systems, the differences, the advantages that you see and then also with the clinicians. And then I've got one follow-up question after that, please.

Yes. Could you repeat that again, Steve?

Sure. You've got advantages in terms of the institution of the T2Bacteria Panel and in terms of how the hospital systems look at it and evaluate, what are the differences that you're seeing and that you think that you'll see into the future? And then also with the clinicians, what are the differences that they'll -- that provide you with distinct advantages as to what you'll be seeing into the future? And again, the way we also look at it is that there are advantages for patients -- of course, patient outcomes, but then patient experience, but it's too early to ask about that.

Yes. No, it's a great question, Steve. So the big advantage here, which cuts across all including the patient experience, is getting the rapid result, which would let you know if a patient has an infection, getting the patient on the right targeted therapy; and if negative, being able to know you don't have one of these infections. At our national sales meeting last week, we had a sepsis survivor patient speak to the sales force. And it was just -- and this is a patient who survived sort of an infection that would be detected by a T2Bacteria Panel. And it could have made a big difference in her life. I mean, it has -- I mean, she survived. But she has an ongoing infection. She has to be tested monthly. It has created financial ruin over a 3-year period for their family because the people -- and her husband not being able to work, just a really horrible story. And she -- and we'll probably all hear more from her in the future. But she would benefit tremendously and is trying to get our product brought into the hospital -- big hospital system that essentially missed that infection because she has to go in to be tested because she's at risk of this infection flaring up. And she has to wait 5 days on a blood culture to know that she doesn't have an infection. And so when you talk about a patient experience, if you could run a T2Bacteria Panel on her, 3 hours later, she could go home and sleep knowing that all is well. And she can kind of continue on with her life. So there's so many uses of our product, so many ways that can make a big difference in the lives of patients. We had so many situations that now we continue to hear about, young children, adults who are being impacted. We've seen it a lot with Candida, and we're now starting to see it with the bacteria panel and a tremendous opportunity for us and a tremendous obligation for us to get the technology into the hospital.

And the follow-up is along the same lines. It's one of the areas that obviously is considered high risk are the oncology applications where you have to really know what shape the patient is before you take the next step in terms of administration of therapeutics. What can you tell us about what your feedback has been there? And I'll jump back in the queue.

Yes. In fact, one of the accounts that closed in the second quarter, Steve, was a large oncology center that will be using T2Bacteria to screen all of their patients. They purchased an instrument. They made a very, very large commitment to an annual testing volume. And it's all because the cancer patients, their immune systems are compromised. When they spike fevers of unknown origin, they need to be tested, and they should be tested. And if positive, obviously, send to a hospital and admitted. So there's a big opportunity there. We talk a lot about the emergency department, we talk about the ICU, the next very large group of oncology patients.

This concludes our question-and-answer session. I'd like to turn the conference back over to management for any closing remarks.

Thank you, operator. I'd like to thank you all for dialing in. We're excited to be into the launch of T2Bacteria. We're excited for the second half of 2018 and into 2019 and look forward to reporting back to you next quarter.

The conference has now concluded. Thank you for attending today's presentation, you may now disconnect.