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Investment Banks Initiate Coverage of Talis Biomedical With Bullish Outlooks

NEW YORK — Investment banks Piper Sandler, BTIG, and JP Morgan on Tuesday initiated coverage of Talis Biomedical.

Piper Sandler gave the company an Overweight rating and a $17 price target, while BTIG gave Talis a Buy rating with an $18 price target. JP Morgan gave Talis an Overweight rating and an $18 price target.

Talis develops point-of-care infectious disease tests based on its flagship Talis One sample-to-answer, cloud-enabled molecular diagnostic platform. Last month, the Menlo Park, California-based company closed a $253.9 million public offering, floating its shares on the Nasdaq at $16 apiece.

In a note to investors, Piper Sandler analyst Steven Mah called the Talis One platform a "compelling proposition for customers requiring rapid, highly sensitive testing," stating that the technology provides central lab with high levels of sensitivity and accuracy with near-real time results in CLIA-waived, point-of-care settings.

Further, the platform's test cartridges, which integrate and automate the sample preparation and purification process, allow for the use of hard-to-test samples, opening the door to future testing opportunities across varied sample inputs, he added.

BTIG's Mark Massaro highlighted Talis' plans to commercialize a range of tests beginning with one for SARS-CoV-2 infection, followed by others for SARS-CoV-2 and influenza, sexually transmitted diseases, and women's health indications. In a note to investors, he pegged the total addressable market for such panels at around $12 billion.

Massaro said that Talis plans to begin launching tests with established reimbursement, beginning with its COVID-19 test after securing Emergency Use Authorization from the US Food and Drug Administration, potentially early in the second quarter. However, the company will price its tests well below reimbursement rates to "enable its clinical customers to not only practice best-in-class real-time care, but also make money doing some of their testing themselves, offering a win-win for both the clinician and the patient," he stated.

"In our view, Talis' platform fulfills a large unmet need for dependable and reproducible POC testing, has huge potential for scalability, and delivery of test results on the spot can have a big impact on patient care," Massaro wrote.

JP Morgan analyst Tycho Peterson wrote in an investor note that he sees Talis' COVID-19 panel as driving inital uptake of the company's Talis One instrument, creating a channel for additional tests that can drive recurring and sustainable high-margin consumable revenue.

Additionally, the ongoing shift in the diagnostics market to the POC setting will "incentivize placements and utilization through improved economics for healthcare providers, creating new revenue streams for physician practices," Peterson wrote.

During early morning trading, shares of Talis were up $.19 to $13.04.