SAN FRANCISCO – Diagnostics specialist T2 Biosystems Inc. is looking to add a new product to its sepsis detection offerings. The Lexington, Mass.-based company spoke with Medical Device Daily, during the 35th annual J.P. Morgan Healthcare Conference to discuss the product, which will detect the bacterial species associated with sepsis.

T2' s president and CEO John McDonough said the company would be in a position to seek approval for the T2bacteria Panel this year.

"From our standpoint the bacteria panel works the same way as our other sepsis detection panels work in measuring what happens in a blood sample," John McDonough, president and CEO of T2, told Medical Device Daily. "We're enrolling patients in a clinical trial as we speak, and we expect to file by the middle of this year."

T2's technology features a magnetic resonance based approach toward sepsis detection. The technology detects sepsis by measuring how water molecules react in the presence of magnetic fields. The company noted that with this approach the company was able to detect specific species of Candida infections in three to five hours at a level that's equal to or better than a blood culture.

When speaking about its market opportunity, the company said that 111 hospitals each year see more than 260,000 symptomatic high risk patients, who could be tested with T2candida, and in the future over 335,000 patients who could be tested with T2bacteria. The firm said if its existing customer base of 111 U.S. hospitals would have all of their high risk patients (tested) with T2candida, then it could generate more than $50 million in annual sales. The company said it would estimate that number to more than double with the introduction of T2bacteria.

In its most recent earnings call, the company said it just added 50,000 high risk patients here in the third quarter.

McDonough said the recent product development along with some strategic financial investments have bolstered the company. Back in September, Canon U.S.A. Inc. doled out $40 million to acquire nearly 20 percent of T2 Biosystems. (See Medical Device Daily, Sept. 23, 2016.) Canon acquired the T2 shares at a closing price of $6.56 on the Nasdaq. In addition, Canon said its chief administrative officer and general counsel, Seymour Liebman, joined the T2 Biosystems' board.

Canon began working with T2 Biosystems back in February 2015 to develop a diagnostic test panel for rapidly detecting Lyme disease. T2 retained all commercialization rights to the diagnostic, to be marketed as the T2lyme Panel, but agreed to pay Canon a royalty on its sales.

T2 Biosystems presented data on the Lyme disease panel at a conference in Huntington, N.Y. The company said the data demonstrated that the diagnostic can detect Borrelia (the bacteria responsible for Lyme disease) directly from whole blood, and at an early stage of the disease.

Canon isn't the only company T2 has partnered with. Last summer the firm reported a multi-year agreement with Leverkusen, Germany-based Bayer Ag to provide its T2 Magnetic Resonance Technology Platform for Bayer's research and development efforts in blood coagulation disorders.

McDonough said these significant partnerships and investments have put the company in a strong position for 2017. The company recently entered into a $50 million debt facility agreement with Crg Lp. The new facility consists of an initial draw of $40 million and ability to borrow an additional $10 million through next year.

"We're extraordinarily well financed," McDonough said. "We ended the third quarter with $75 million in cash and we'll probably be around that mark at the end of the year."