Canaccord cuts T2 Biosystems to hold on Q3 results and guidance

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Canaccord Genuity Capital Markets downgraded T2 Biosystems (NASDAQ:TTOO) to “hold” from “buy” and slashed its price target to $2.50 from $12.50, adjusted for the recent 1-for-50 reverse stock split after the company reported soft preliminary third quarter results and lowered its 2022 guidance. The stock closed at $2.59 on Oct. 13.

In addition, analyst Kyle Mikson cited “slower-than-expected pipeline progress and ongoing capital and liquidity concerns” for the downgrade.

T2 develops and commercializes innovative medical diagnostic products for critical unmet needs in healthcare.

Mr. Mikson said that according to management, the shift to sepsis testing for previously COVID-focused installed instruments is taking longer than T2 anticipated. As a result, the company reduced its 2022 revenue and T2Dx instrument placement guidance.

T2 also remains in a “relatively challenged liquidity position and the company continues to seek funding options to mitigate its cash burn,” he added.

“Although we remain optimistic about the company’s long-term growth potential, we move to the sidelines until operating momentum returns and the company approaches a more favorable capital position,” Mr. Mikson said.