In a May 31 research note, analyst Ram Selvaraju reported that H.C. Wainwright & Co. lowered its target price on T2 BioSystems Inc. (TTOO:NASDAQ) to $10 per share from $11 after adjusting its model on the company to reflect its current share price, which is around $1.68 per share.
Selvaraju explained that H.C. Wainwright's estimated market value of T2 Biosystems is still $557 million, but given where its stock is trading, the company may need to issue more shares to raise the capital it will need to fund operations.
In other news, T2 Biosystems' management, in a recent conference call, reiterated its 2019 guidance of securing 70–80 contracts for its T2Dx diagnostic system and generating twice as much revenue as last year, Selvaraju indicated.
"We continue to believe that T2Bacteria would be the main driver to help the company achieve its financial goals in 2019," added Selvaraju. T2Bacteria is a test, approved by the U.S. Food and Drug Administration, to identify, from whole blood, sepsis-causing bacteria. The panel covers 90% of the ESKAPE pathogens commonly resistant to broad-spectrum antibiotics: Enterococcus faecium, Staphylococcus aureus, Klebsiella pneumoniae, Acinetobacter baumannii, Pseudomonas aeruginosa and Enterobacter species.
Also noteworthy, earlier this month the Annals of Internal Medicine published the results from the pivotal trial on the panel, which showed that "T2Bacteria's accurate diagnosis of bloodstream infections is much faster than blood cultures," noted Selvaraju.
Specifically, with T2Bacteria, it took 3.61 to 7.7 hours to identify the species present, depending on the number of samples tested, versus 71.7 hours with a blood culture. With this faster diagnosis, patients could get antibiotic treatment sooner, "thereby improving clinical outcome and lowering hospital costs," Selvaraju pointed out.
H.C. Wainwright & Co. has a Buy rating on T2 Biosystems.[NLINSERT]
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Disclosures from H.C. Wainwright & Co., T2 Biosystems Inc., Target Price Revision, May 31, 2019
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Raghuram Selvaraju, Ph.D. and Yi Chen, Ph.D. CFA, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of T2 Biosystems, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of April 30, 2019 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of T2 Biosystems, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did not receive compensation from T2 Biosystems, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in T2 Biosystems, Inc. as of the date of this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.