Alliance Global Partners launched coverage of T2 Biosystems (NASDAQ:TTOO) with a “buy” rating and price target of $5.00. The stock closed at $2.62 on May 15.
Analyst Ben Haynor writes that the company’s two diagnostic panels, T2Candida and T2Bacteria, which identify five fungal and five bacteria species indicated in sepsis, respectively, are highly differentiated, “providing highly accurate answers in hours compared to competing modalities that can require days or even weeks”.
The panels can provide highly accurate results, with 90%-plus sensitivity and specificity, in three-to-five hours directly from a patient blood sample. In contrast, the current standard of care can take one-to-five days or more to return an answer with 50% to 65% sensitivity.
Haynor said that studies show that if appropriate antimicrobial therapy is not administered within the first hour of detecting an infection in sepsis patients, survival rate falls 7.6% per hour for the next six hours, “Thus, being able to aid in placing the patient on appropriate therapy more rapidly makes an out-sized impact on outcomes.”
The company has gained FDA clearance and CE Mark of their T2Dx instrument and T2Candida and T2Bacteria panels, as well as breakthrough device designation on their T2 Resistance panel, which is in development.
“Sales cycles have been more rapid than anticipated. We expect product revenue to double this year and next as a result,” he said, noting that every hospital T2 closed last year on its T2Bacteria panel made the decision in 30-90 days, far more quickly than the typical six-to-12 month diagnostic instrument sales cycle.
