T2 Biosystems said today that approximately $40 million of its stock has been purchased by Canon USA, a collaboration partner of the diagnostics developer.
The equity investment gives Canon 19.9% ownership of T2 Biosciences.
Since February 2015, Canon U.S. Life Sciences has collaborated with T2 on the development of its T2Lyme Panel, a diagnostic test designed to identify the bacteria that cause Lyme disease directly from a patient’s blood, without the need for blood culture.
Yesterday at the Diagnostic Tests for Lyme Disease Conference, held at the Banbury Center at Cold Spring Harbor Laboratory, T2 Biosystems CSO Tom Lowery, Ph.D., presented positive data on the company’s T2 Magnetic Resonance (T2MR®) technology for the detection directly from whole-blood samples of Borrelia, the bacteria that causes Lyme disease.
T2MR is a diagnostic detection method that uses miniaturized magnetic resonance technology to measure how water molecules react in the presence of magnetic fields.
T2Lyme Panel is expected to be run on the FDA-cleared T2Dx Instrument, now used to run T2’s FDA-cleared T2Candida® Panel and its future T2Bacteria™ Panel.
“This financing puts us in a solid position to continue to grow the business, including furthering our launch of the T2Bacteria Panel into the market in 2017 and beyond,” T2 Biosystems CEO John McDonough said in a statement. “We expect the T2Bacteria Panel to be a critical catalyst for our overall sepsis commercial efforts, and we remain on track to submit our application for marketing clearance to the FDA by mid-2017.”
Under the collaboration, Canon agreed to pay T2 Biosystems $2 million upfront, and $8.5 million in payments tied to achieving developmental and regulatory milestones. T2 retained exclusive worldwide commercialization rights of any products developed through the collaboration—including sales, marketing, and distribution—but Canon will receive royalty payments on product sales resulting from the collaboration.
Both companies also agreed at the time to explore additional operational areas to work together as well as additional future diagnostic product opportunities.
Canon agreed to purchase the T2 Biosystems shares at Tuesday’s closing share price of $6.56, in a private placement that closed yesterday.
As a result of the equity investment, Canon’s chief administrative officer and general counsel, Seymour Liebman, has joined T2 Biosystems’ board of directors.
T2 Biosystems has two FDA-cleared products targeting sepsis and several additional products in development.