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T2Biosystems (NASDAQ:TTOO) shares closed 11% lower Wednesday, marking another rocky session for the diagnostics developer that said in August it didn’t think it had enough cash to make it through the year.
Shares of T2 rocketed 64% on Monday amid reports that it had won FDA approval for its T2Biothreat Panel, a molecular diagnostic blood test for detecting exposure to such potentially deadly pathogens as anthrax and plague. Development of the test has been funded in part by the US Government.
T2 confirmed the FDA approval on Tuesday, adding that it planned to focus on selling the product to commercial markets and governments. Despite the confirmation, shares of T2 tumbled 26% to close at $0.34.
As of Wednesday evening, T2 shares were down 81% year-to-date, with the company having a market capitalization of $113M, according to SA data. The stock was up 6% at $0.32 in after-hours trading at around 6:35 p.m. ET.
Also on Monday, T2 disclosed in an SEC filing that its shareholders had approved another reverse stock split. According to its 10-Q filing dated Aug. 8, T2 is considering a reverse split to regain compliance with Nasdaq’s minimum bid price rule. The company conducted a 50-for-1 reverse split in Oct. 2022.
But T2’s issues run deeper than its share price. In its 10-Q filing in August, the company also expressed doubts about its ability to continue as a going concern. T2 reported having $16M in cash and equivalents by the end of June 30, but didn’t think it would be enough to support operations through Q4.
As a result of the cash crunch, T2 said in its 10-Q filing in August that it had initiated a reduction of nearly 30% of its workforce in May and was exploring strategic options, including a sale of the company or its assets.
The company currently has three FDA-approved testing panels besides T2 Biothreat: T2Candida, T2Bacteria and T2Dx Instrument, along with an emergency use authorized panel for detecting SARS-CoV-2, the virus that causes COVID-19.
Despite the product approvals, T2 has been operating in the red, reporting a net loss of $6.35M on revenue of $1.96M for the quarter ended June 30.
(Updates to clarify details about company layoffs and reverse stock split. Also updates stock activity.)
