T2 Biosystems (TTOO) Stock Research: Fundamentals & Technicals
T2 Biosystems (TTOO) has a $245M market cap, a niche diagnostics company aiming to be a player in a few large and growing markets.
TTOO is expecting just $11.1M in sales in FY18, though up 137% from the previous year, and is in the early stages of a strong revenue growth cycle. Its flagship technology is T2MR which has broad applications and the company targeting a $3B+ market potential. It calls T2MR the new standard in detecting pathogens associated with Sepsis which is the most expensive hospital-treated condition in the US costing $27B per year. Its T2Bacteria Panel is a $1B+ market opportunity designed to rapidly identify six of the most deadly and prevalent bacteria species.
The platform is currently in 162 hospitals with a goal of 1,200 hospitals. A key catalyst for 2018 is the T2Bacteria up for FDA clearance. The company is also looking to establish new strategic partnerships and continue its expansion into European markets. Its T2Lyme Panel is another interesting pipeline product with the rising Lyme Disease numbers.
Statistics source: Sentieo; images from company presentation.
TTOO shares traded above $23 when it debuted in 2014 before sliding as low as $2.50/share in mid-2017. Shares are showing momentum in 2018, +75% YTD, and are clearing a key volume zone while showing clear accumulation.
TTOO is clearly a more speculative play, but its commercial product is seeing strong momentum and at the very early stages of penetration, while other products in the pipeline can add additional market potential. Diagnostics will be an important focus moving forward in the US Healthcare system to save on costs, and TTOO offers a product that not only can save a lot of costs for hospitals, but also save lives via fast and early detection of deadly conditions.
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The author has a long position in TTOO at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
