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H.C. Wainwright Initiates Coverage of T2 Biosystems With Buy Rating

NEW YORK (360Dx)  – Citing the technology's ability to detect sepsis in blood samples within hours, H.C. Wainwright today initiated coverage of T2 Biosystems with a Buy rating, and a 12-month price target of $8 for the company's shares.  

In a note, Wainwright analyst Raghuram Selvaraju wrote that that the company's T2 magnetic resonance technology enables the in vitro diagnostic assessment of molecular targets in samples without needing sample preparation or blood culture. The technology reduces the sample-to-result timeframe to three to five hours, compared to multiple days that are standard for blood culture.

In addition, Selvaraju noted that T2 Bio  is the "only commercial-stage diagnostic company whose products can identify pathogens associated with bloodstream infections in a variety of unpurified samples."

Selvaraju further noted  the economic benefits to hospitals. A recent study conducted by IMS Health showed that if an average hospital, admitting 5,100 patients at risk for Candida infections, used the T2Candida panel, it could save about $5.8 million annually, and reduce patients deaths by 60 percent.

Further, T2 has established collaborations to expand its installed instrument base. Most notably, Selvaraju wrote, the Centers for Disease Control and Prevention utilized the T2Dx instruments in their laboratory for testing patient skin and blood samples. T2Dx instruments are also used in clinical trial sites to help enrollment for Cidara Therapeutics antifungal drug candidate. It also has co-development agreements with Canon US Life Sciences to develop a panel for Lyme disease, and with Allergen to develop bacteria and drug-resistance panels.

Selvaraju expects both the "install base and number of tests performed per instrument to continuously increase for the following years, as more hospitals realize the clinical and economic benefits of T2MR."

In September, T2Dx filed a 510(k) premarket submission for T2Bacteria with the US Food and Drug Administration. If approved, T2Bacteria could expand the company's target market from 450 to 1,200 hospitals, according to Selvaraju.

Wainwright estimated that the company "may become profitable in 2022, during which a total of roughly 475,000 test would be performed with revenue of $98.6 million."

The company's stock was up 5 percent at $4.26 in mid-afternoon trading on the Nasdaq.