Matt Clawson - IR John McDonough - President & CEO Moe Castonguay - CFO David Harding - Chief Commercial Officer.

Bryan Brokmeier - Cantor Fitzgerald Joel Kaufman - Goldman Sachs Paul Knight - Janney Capital Markets Steve Brozak - WBB Securities Mark Massaro - Canaccord Genuity Kevin Chen - Leerink Partners.

Welcome to the T2 Biosystems 2016 First Quarter Results Conference Call. [Operator Instructions]. I would now like to turn the conference over to your host, Matt Clawson of Pure Communications. Thank you. You may now begin..

Thank you, operator. Good afternoon, everyone. Thanks for joining us for T2 Biosystems' first quarter results conference call.

On the call this afternoon to discuss results and operational milestones for the period ending March 31, 2016, are President and CEO, John McDonough; Chief Financial Officer, Moe Castonguay; and David Harding, our Chief Commercial Officer. John and Moe will lead off the call with some prepared remarks, followed by a question-and-answer period.

I would like to remind everyone that comments made by Management and responses to questions today 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' filings with the SEC, the risks factors section and its registration statements on Forms S-1 and 10-K as well as other risks and uncertainties detailed in subsequent SEC filings.

The Company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. With that, I would like to turn the call over to CEO John McDonough for his opening comments. Good afternoon, John..

Thanks, Matt and good afternoon, everyone. Thank you for joining us on the call today. I'm sure most of you are aware that we pre-announced certain first quarter metrics on April 11, including hospital commitments and other commercial measures in the quarter. Since we had that call such a short time ago, I'm going to be brief today.

I will reiterate the key accomplishments and lessons learned from the quarter, offer a new anecdote from a hospital I think demonstrates the value we deliver via our technology, have Moe will go over the financial details and then make some brief closing remarks before I open the call up to questions.

We closed three hospital accounts in the United States during the quarter, less than we anticipated and two in Europe which is ahead of expectations.

As we discussed, predicting the timing of hospital close rates over a short period of time in the early stages of product adoption is difficult, especially for a revolutionary value proposition like ours.

What we're offering is helping to save lives and dollars every day now, but we're changing the decades-old fundamental hospitals defend against sepsis. And when you are changing a paradigm for patient care, there can often be hitches in the final stages that create delays.

That said, we never felt more sure of our selling proposition as the evidence of our value proposition is now rolling in. Most importantly and perhaps of most importance to you, however, is that we're tracking wealth and we believe the market demand for our platform remains robust.

We completed a deep analysis of our sales pipeline and in light of the slow Q1 start, we've taken a prudent step of a dozen our target to 45 to 65 hospital and lab commitments for the year which would bring our total customer base to 75 to 95 hospitals by year end.

As we progress through the year and gain greater insight, we will update you on that target. Europe has always been a key target for us but it has been a pleasant surprise.

We closed three distribution agreements with well-connected partners during the quarter, ahead of our goal of two, enabling us to close two customer placements in the first quarter. Again, that's ahead of our expectations that the first customer placements would be in the second half of the year.

Our distribution partners in Europe are experienced in the microbiology space and skilled in identifying the best customers for our technology so we believe we're well situated there.

We also believe that the introduction of T2Bacteria into the market which we currently expect to occur early next year, will make a significant difference in driving adoption.

The need for rapid detection of bacterial sepsis is similar to Candida sepsis, but based on our experience there appears to be a broader market appreciation for bacterial sepsis.

We have a number of hospitals in the sales pipeline that have stated that they are waiting for the bacteria panel to be added despite the clear economic and clinical value generated by Candida alone.

We're currently making the necessary investments and build out of the sales team for optimal success today and to prepare for the co-marketing of both panels. Our target continues to be to have 20 people on board the sales team by the end of Q2 and add as we see the need for the end of 2016.

Before we touch on the financials I will share one brief anecdote. We received a very enthusiastic call recently from one of our hospital customers that recently went online with their system and started testing patients. Based on our T2Candida test, they picked up a patient who tested positive.

Knowing with certainty what was going on with the patient and after administering the proper anti-fungal drugs, they retested the patient four days later and the infection had cleared. Because of the ability to rapidly identify the cause of the infection and to rapidly know the infection had cleared, the patient was sent home four days early.

It's a simple example and one that we understand maybe replicated now in our growing family of institutions, but it demonstrates a kind of outcome our technology can produce. From the hospital and the patient's viewpoint and of course from ours, this is wonderful news and it's just an example of the kind of very satisfying feedback we're receiving.

Now finally, I would like to take a moment to briefly comment on the second piece of news this afternoon which is the transition of the CFO role from Moe Castonguay to Shawn Lynch. As a press release indicated, Moe has decided to retire and Shawn will assume the CFO role after brief transition period to help ensure smooth handoff.

Despite his relatively brief tenure, Moe made a significant contribution to the financial systems and operational health of the Company. He has been a trusted partner and a helpful resource for the investment community. We wish all the best of luck as he contemplates the next and hopefully more relaxing phase of his life.

I'm happy to report that we're able to attract an exceptional executive to take on the CFO role and to bring his own stamp the T2 Biosystems. Shawn has served in senior finance leadership roles in public companies for the past 13 years.

He most recently served as Vice President and Chief Financial Officer of PerkinElmer's environmental health business, a provider of analytical instruments and consumables to the food, environmental and pharmaceutical end markets.

Prior to that, Sean was with General Electric in various roles of increasing responsibility, with his last assignment serving as Global Controller, Measurement and Control. Shawn started his career at KPMG where he served in the firm's M&A and audit practices.

Shawn is a Certified Public Accountant and received a BS in Accounting from Suffolk University. We believe his outstanding record of experience managing the finances within rapidly growing organizations, as well as the discipline and systems acumen that comes from a long tenure within the General Electric organization, will serve T2 well.

He has a sterling reputation and I am certain that you will all enjoy working with Shawn when he officially takes the reins and begins to attend investor events and meetings next month. With that, I will turn the call over to Moe, who is here to do the call with us today and I know you will all join me in wishing him all the best.

Moe?.

Thanks, John. Total revenue for the first quarter was approximately $1.1 million which consisted of $437,000 in product revenue, primarily from consumable diagnostic tests and $659,000 in research revenue.

Total operating expenses for the first quarter were $12.8 million, reflecting increased investment in our sales force and commercialization of our products. The net loss applicable to common shareholders for the first quarter $13.4 million or $0.55 loss per share, compared to $10.6 million or $0.53 loss per share, in the first quarter of 2015.

Our balance sheet as of March 31, 2016, remains strong reflecting total cash flow and cash equivalents of $59.5 million, with an additional $10 million available under our equipment lease credit facility. Our first quarter cash burn was higher than a normal quarter, due to payment of 2015 year-end accruals.

Now for our 2016 outlook, we expect 45 to 65 new customer commitments globally for the year. Pricing on our T2Candida is expected to remain stable in the remain of $200 and $250. In first year commencing shipment, roughly 90% of placements were under a reagent amendment model, that number remains a good estimate of the pattern going forward.

Research revenue is expected to be comparable to what was realized in the first quarter of 2016. We anticipate total second quarter operating expenses to be between $12.8 million and $13.2 million, including approximately $2 million in non-cash expenses that consists primarily of depreciation and stock compensation expense.

Virtually all increases in operating expenses are associated with investment and building our sales and commercial activities, both in and outside of the U.S., new product development, the clinical trials associated with new products and building the infrastructure required to support the scale of business we expect to realize in 2017 and beyond.

We expect net interest expense to be approximately $750,000 in the second quarter. We anticipate the total number of common shares outstanding will be approximately 24.4 million in the second quarter and for the full year we're forecasting 24.7 million.

I would like to say thank you to many of you who I have had the good fortune to get to know over the past year. It has been a pleasure and great experience working with John and the entire team at T2 Biosystems. I believe that I am leaving the Company in capable hands and better than when I arrived.

With that, I would like to turn the call back over to John for some closing remarks.

John?.

Thank you, Moe and I agree on both counts. We remain very confident in our business and the momentum we're establishing. We believe we have made the necessary investments we need to make in building our sales team and commercial infrastructure to prepare for and support the growth we're expecting throughout this year and next.

We believe the introduction of our T2Bacteria product in early 2017 will help further drive adoption of our technology and drive future growth.

With each new time our T2MR technology goes online, we now received different and wonderful feedback from the hospitals where does operating, that kind of enthusiastic feedback is very gratifying for our entire team, to learn firsthand how our work is making a difference.

That real-world experience is also translating to a growing body of data, demonstrating that the value of our system, both financial and clinical, is real and demonstrable. We expect to see several presentations and posters at the ASM Conference in June, where some of our first customers will be reporting on impact we're having in their hospitals.

We look forward to sharing some of the studies and findings with you in the coming months.

The business is tracking well and while we're still in the early stages of growing revenue, we're building a strong customer base with T2Candida and have developing pipeline of products, including T2Bacteria, that we expected drive further adoption of our platform in hospitals around the world and utilization of our diagnostic tests that will drive revenue and ultimately long term profitability.

Finally, I will be attending the upcoming Deutsche Bank conference in early May and the Goldman Sachs conference in June. I hope to see many of you at those events and others that we will follow the summer. With that, I will turn the call over to the operator for questions.

Operator?.

[Operator Instructions]. Our first question comes from Bryan Brokmeier from Cantor Fitzgerald..

We just spoke a couple of weeks ago, so there's not a lot of new questions, but is there any color that you can provide on the second quarter to date? I know you don't plan to provide this kind of information going forward, but just given the mix in the quarter, I thought you might be able to provide a little bit of color..

Sure, Bryan, I hope all is going well. Thanks for dialing in. In terms of Q2, as we mentioned, we're not going to provide any specific updates as we haven't done that in the past, but we do feel we're right on track to achieve a significant uptick in Q2 over the results that we saw in Q1..

Okay.

Are you seeing any impact on your pipeline from any competing products while they may not be directly competing, nothing as rapid as the system that you offer, but other microbiology systems of that have been introduced into the market?.

Nothing at all on that front that we see touching any of our business..

Lastly, are you seeing any fundamental changes in the sales cycle that indicates that it may be longer than you had previously anticipated?.

No, we haven't seen anything that would suggest the sales cycles are longer at all. I mean there's a certain ebb and flow getting clinical buy in typically initially going through the economics, going through hospital administration, lab support, really no changes that we've seen from the sales cycle, faster or longer..

Our next question comes from Isaac Ro from Goldman Sachs..

It's actually Joel in for Isaac.

Just one on the cash burn, just how should we be thinking about your specific plans to manage the burn until you guys can hit profitability sort of on track with where the Street has their expectations at this point?.

Certainly, we're going to be very prudent, Joel, in how we're spending cash on a go-forward basis. We don't have any current plans for financing and we feel we have adequate cash reserve certainly to take us all the way through a T2Bacteria launch next year. Having said all that, we'll certainly keep our eyes open and be opportunistic.

Lots of interesting things going on the business development front around new applications that could be a source of capital. As it relates to the capital markets, we will just give an eye on those sorts of things. No need, no plans to raise any capital in the short- to midterm.

Maybe just a follow-up to that, I don't think we've spoke about hemostat in a while.

Any updated thoughts on the best path to commercialization there?.

Yes, that's a great question. There's likely to be two paths, if not three. One is going through the FDA here in the United States. This is a new technology, a new platform. We're in discussions with the FDA.

The product is getting close to be ready to enter an FDA trial, but we need to really align ourselves with the FDA on exactly what that trial would look like and what you would be comparing results to. So those discussions are ongoing.

I think it's quite possible, if not likely, that we would take that product even ahead of FDA clearance through to a CE mark and a launch in Europe. We've certainly seen a lot of interest in Europe and need for the product.

Thirdly, there are lots of interesting opportunities on the business development front, in research applications, working with pharmaceutical companies and the like and we're exploring all of that as well. I really think there's likely to be, if you will, three streams to monetization.

The path and timing to FDA clearance is probably the one that's the biggest opportunity, but it's really cut the layout of timelines right now until we know exactly what that trial might look like..

And then just a last one. Given the placements we seen outside the U.S., long term how should we be thinking about the margin profile of your business outside the U.S.

outside relative your domestic business?.

There are kind of two angles to that. Certainly the gross margins, usually with an international distributor and they all very but you could think about your pricing as being roughly 30% less than what you might get in the U.S.

So on one hand, your gross margins are a little bit lower, but the flip-side is you don't have the same sales and marketing investment running your operating expenses driving that revenue.

Net-net, the more thing us what is the impact on operating margins, it's pretty close, honestly and likely to be better, if you will, because you're leveraging all your G&A and R&D investments in the international market.

So on an incremental basis, it will likely positively affect operating margins but if you try to fully load everything, it's probably plus or minus 10% of what you might see in the U.S..

Our next question comes from Paul Knight from Janney Montgomery..

It looks like your -- its early days I know, but the reagent sales for online instruments seem to be kind of flat to slightly down in the quarter.

I know maybe we've hashed over this already, but can you talk about how you feel about reagents per online instrument?.

Absolutely. Reagent revenue in Q1 was sequentially about 27% higher in Q1 than it was in Q4, so we saw a nice uptick there.

The last call, I think we talked about the fact that a lot of accounts were coming online late in the quarter and shipments were going out late in the quarter which kind of leads to a delay of when they come online and testing patients and all that sort of thing.

So we're seeing so are seeing a nice steady growth in the net reagent revenue per account, but having said that, it is way too early to start reporting on those numbers and we've been saying this, I think, from the outset that starts to likely look like members we should start talking about in Q3 if not Q4 this year.

We will report on it once we think it's meaningful numbers that will help guide an investor. What we think as we go into the typical high-volume account, just to summarize, we typically are seeing on average the potential for testing 5,000 high-risk patients at these top 450 hospitals which is our primary target market.

Our early estimates where that over some period of time, 12 to 18 months after an account goes live, that we might be able to capture on average about 60% of that overall testing population, that would suggest that you can get up to about 3000 tests. We haven't changed our view of that at all.

The problem is, I think we have maybe one or two accounts that have been testing patients for six months. We don't have anybody out there long enough to know what that growth curve is going to look like and whether it's going to be 12 months or 18 months and where the average peak out.

Now, not surprisingly and consistent with how we've model it, the 80/20 rule appears to be in play and I'd really call it the 70/30 rule. Almost in all areas of business I've been involved with, the rule was 70/30, not 80/20.

By that I mean 30% of your accounts are killing it on the high end and you're getting to an average but you have very few that are at the average. You either have your high-volume ones and then you have lower-volume ones and at a very early stage, that's sort of what we're seeing.

If you looked at the accounts that are online, roughly 30% of them, 20% or 30% of them, seen to be coming out really strong. Others are coming out a little slower. In terms of net average, so far it's in line with what we expected.

But again, it's still too early to really know how it's going to play itself out until we get out there and have at least a dozen accounts with 12 if not 15 or 18 months of experience under our belt..

John, based on what you're seeing on turnaround time for tests, what do you think the throughput now is of a single instrument, annually..

In terms of the capability of an instrument, Paul?.

The number of tests you think it could run through per year..

We think a single instrument, if you are running two shifts, not three, could run in the order of 5000 tests per instrument coming out, that would mean every seat of the plane is 100% loaded five to six days a week, but only assuming two shifts..

Our next question comes from Steve Brozak from WBB..

Let's follow back up on the last trend of questions here.

Obviously, I know that you're still waiting for more than just anecdotal feedback, but can you give us examples of how you're seeing changes in treatment protocol or what kind of feedback you're seeing from the clinicians that you have been working with and what they are saying, what kind of feedback they are giving you? Because by this time now, you've got people that are saying, hey look, we would have missed this or we would've done this differently or we were doing this differently.

If you could give some feedback, if at all possible, from more one place? And then I've got a follow up after that, please..

I think there are a number of different examples that we can point to where they have in fact started to change clinical practice.

I think the one that John alluded to is a very interesting one, where not only are they identifying the positive candidate patients early and getting them on the right therapy, but they are really starting to use it as a test of clearance of infection.

I think that's one pretty dramatic change that we can point to, that's really, really beneficial for the hospital in terms of reducing total number of days in the institution.

Secondly, I think is one that we've seen fairly commonly and that is using the T2 test to identify that A, patient does not have a candida infection and can therefore can be de-escalated from anti-fungal therapies.

That is a way that they are really changing their fundamental protocol to curtail the use of anti-fungals and really drive savings to the institution from a pharmacy perspective.

I would say the other way that they have thought about changing their medical practice and have, is to not even start the patient on anti-fungals and rather wait for the T2 test to come back positive or negative before they initiate therapy.

Those are three ways that we're seeing pretty fundamental changes in the way that physicians are thinking about treating their patients as a result of the availability of the T2 test..

Yes and if I could just add on to what David talked about. One of the areas that's been really a nice, I guess, surprise, like certain areas that you don't think about whole lot, in fact we don't even talk about it with customers, has been all around the value of this negative test results.

Remember, on a negative there's no product in the market that can give you a faster than five-day negative because of blood culture at least takes five days. We've seen cases where blood culture test have been drawn, where a patient is on a PICC line and it's pretty common in institutions to do the blood culture draw from the PICC line.

So they've done the draw, they've had a positive result and then they've gone into confirm with T2Candida and they've gotten a negative result because they don't draw T2 from the PICC line.

In those cases, they would normally be pulling the PICC line from the patient and they are not because the PICC line itself is often contaminated and so you end up with a false positive on a blood culture with a pretty high frequency rate when you do that blood culture draw from a PICC line, that would be one example.

The other one which is really interesting and these stories are almost rolling in, I would probably be overstating it if I said daily, but certainly a couple times a week, but there was just one today were one institution who probably will be talking about this at the ASM Conference, they are seeing that they're testing positive patients who are in the intensive care unit and then when they are getting negative test results, they're moving those patients right out of the ICU and into the general ward and they're doing the four days quicker than that traditionally have done that.

Well, there is huge value in that, right, because the average cost of a day in the ICU is between $4500 and $5000 where the average cost of a day in the general ward is about $1500.

If you take the low end of that, $3000, four days, that hospital is saving $12,000 by moving the patient safely, knowing the patient is negative on that negative test result.

Doesn't even factor in getting them out of the hospital quicker which will also likely occur because of having the detected the patient quicker and put the patient on the anti-fungal quicker..

There is just one other. This is David again. On the positives that you asked about that may not be being picked up by blood culture, we're certainly seeing T2 pick up some of those positive cases where blood culture never went positive.

So truly missed cases by blood culture are in fact now being identified and obviously treated by using the T2 test very, very early on.

In our clinical studies, we consistently found that blood culture was missing in basic candidiasis for cases and in fact are seeing real clinical evidence that T2 is picking up these cases that blood culture would have otherwise missed..

Actually, that leads me to the next question, because now you're talking about orders of magnitude or difference in terms of clinical applications.

When you think you're going to start to see explanations to these folks on the pharmacoeconomics and the clinical economics specifically when they are looking at the savings that ultimately they are going to have to bear.

Obviously, the primary focus is going to be patient outcomes, but at the same time now you are talking about a situation where the margins are just so different based on accurate testing and treatments.

So when do you start to think about, hey look, if these numbers are continuing and they are, at some point these people have to say, hey listen, we're making a mistake here if we don't adopt this technology as quickly as possible? What are your thoughts there?.

I have to preface all of this with we believe but let me just say we strongly believe there's going to be a tipping point where it's much more risky not to adopt T2Candida and T2Bacteria than it is to adopt, both clinically for the patient and economically for the hospital.

We think in the very short run, the most important thing that we can do to accelerate that tipping point is getting these stories out on the market, especially as it relates to the economics.

It's an interesting position, it's usually pretty accepting about the impact we can have a patients, that's easier to convince people about and where it gets a little bit slower is on the economic side. So getting these stories out are going to be a really key part of what we're doing from a marketing standpoint.

We're looking forward to ASM but that really just be the beginning. I think it starts to get interesting as we get into the second half of 2016 in terms of the potential to start moving towards that tipping point.

The other piece that I think, if that doesn't do it, then I think that the interdiction of the T2Bacteria panel just might be the one that pushes it all the way over the top because when you add T2Bacteria to the story, you are enabling patients, 95% of patients roughly, to ensure that they are getting covered within the first five to eight hours of presenting signs and symptoms.

You're also covering roughly 50% of all causes of sepsis through the combination of the panel of T2Bacteria and T2 Candida.

So whether it's the continued stories as we go to the second half of 2016 into 2017 or the introduction to T2Bacteria, I know enough to know is really hard to predict when that point will occur, we certainly think the momentum is building. These stories keep rolling in.

It's our job to make sure that everybody knows what's really happening in the market and we really believe that, that will occur..

Our next question comes from Mark Massaro from Canaccord Genuity..

The first question is maybe for John. I know two of your large hospital system customers operate 22 and 14 facilities, respectively.

How should we think about these systems ordering multiple units as we look out to the end of 2016? Do you think we might see multiple orders with Candida alone?.

Yes. I think it's likely that we will, frankly, that we've have to get them through validation and verification and out and running and they're proceeding.

David, anything you'd want to add to that?.

No, I think it's very logical as we sort of the deliver proof of concept to these hospital systems that their volumes will now truly rise to a point where they would implement a second piece of equipment..

I don't want to steal the thunder too much from ASM, but John, can you give us a sense for the flavor of some of the posters or some of the data we might see at ASM? Maybe related to that, when you think we might see some larger publications that may potentially push some other hospital systems over the edge to adopt?.

Yes. I think at ASM, Mark, what you'll see is a combination of posters and presentations. You will certainly get lots of, I think, anecdotal stories of patient impact. We're aware of two customers, I believe, that will be showing economic studies or at least partial economic studies.

That's probably the right way to say it they because may not have all of the economics summarized in time for the conference. The data based on we know, it will be stunning and exciting. Whether it's large-scale enough, that'll be in the eyes of the user and leader of information.

I know at SciTech, at the time I left, it was the 1,000th publications, so for some that still wasn't enough. We won't be at the 1000 mark yet, but we will have some really good data. And the other thing is that you will see, you will definitely see something scientific and technical data.

You will see some studies that have been run in labs during the verification process and the robustness of the assay and the ability to detect in the presence of interferences and all that sort of stuff.

There should be a healthy summary of data and usually when you go to these conferences there are other things going on that we might not even be aware of because were certainly not tied in to every session what's going on or knowing who will be saying what..

A few weeks ago you noted some of the contracts that you expected to report in the quarter moved out a little bit due to customer readiness.

Two-part question, one is are these customers still in your funnel? And secondly, are you seeing any change that might impact customer readiness as we look out to the next quarter or two?.

Yes. Not aware of any account that's not still in the funnel. Yes, they are still active and moving forward. We believe will get all of them, it's just a matter of when. In terms of change, I think what we're seeing a little bit and I will let David add to this, we've added a lot of new salespeople recently, going back even to Q4.

We're deftly seeing the funnel of that. We're definitely seeing some accounts in the funnel moving fast and it tends to be bifurcated and we saw this throughout 2015.

Some accounts, we talked about the average sales cycle being 6 to 12 months, some are 3 months and some are more than 12 months, so the more you get in there, you're able to pick up some of these 12-month systems.

One of the things that we're definitely seeing that has impacted the timing of getting these accounts closed even in Q1, in terms of what slows the project down, is we're seeing kind of a high number implementing epic and electronic management systems which, when they're implementing a new product, they have to input new order codes and all that sort of stuff.

We get sometimes tied up in weighting, sometimes it affects us in getting a closed account to go online testing patients. Sometimes you have to get in line in terms of when the project is -- are they willing start it until they complete that project. I would say we here at that one with some amount of frequency that slows things down in Q1.

We'll probably continue to hear about it, but I don't think it's going to be a major issue for us but if it went away it would certainly speed things up..

My last question, just wanted to make sure the distributers in Europe are nonexclusive.

Is it fair to say that it's typically the one distributor per country model? Secondarily, are there countries in Europe where you think you can go direct? If so, when you think you might see feet on the street in Europe directly?.

This is David and the answer to your first question is yes, they are typically exclusive one country per distribution partner. In terms of your second answer, we're evaluating direct versus distribution based markets for each of the major European countries.

We will continue to evaluate that over the course of the next couple of quarters but based on those decisions and the quality of the distributors that we see as we evaluate each market, we will make an appropriate decision.

I think is a little premature to say when we will have feet on the street there but where rapidly moving through the major European countries and hopefully we'll have answers on each of those within the next quarter or two..

[Operator Instructions]. Our next question comes from Dan Leonard from Leerink Partners..

This is actually Kevin Chen for Dan. You mentioned in your remarks that some accounts that are more interested in the T2Bacteria panel. Could you give some color on those accounts, whether they are patterns that you can optimize your sales process on and what percentage of ongoing conversations do they make up? Thanks..

Yes, so we track those pretty closely. I roughly represents maybe 15%, maybe 20% of total conversations and by that I mean those who are saying, hey, we will implement this with -- T2Candida with T2Bacteria. There is a lot of interest in T2Bacteria. I would close to 100% of the accounts that we're talking to want to adopt T2Bacteria.

But in terms of slowing us down, it's probably more like 15% to 20%..

Are there kind of patterns that you see on the accounts that fall within the 15% to 20%?.

I don't think there's a real pattern there, other than different people looking for different critical mass. There's not a size difference. It's just more of an institutional preference difference..

At this time we have no further questions. I would like to turn the call back over to John McDonough for closing comments..

Well thank you all very much for dialing in today. I know this was only a couple of weeks since our last call. We look forward to reporting back in Q2 and again I want to think Moe Castonguay for all of his contributions over the past year and wish him all of the best as he goes forward. Thank you..

Thanks, John. Thanks you, everyone..

This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation..