Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why T2 Biosystems Stock Is Soaring Today

By Prosper Junior Bakiny - Jan 12, 2021 at 2:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors are excited about the prospects of the company's COVID-19 diagnostic test.

What happened?

Shares of T2 Biosystems ( TTOO -9.71% ) are soaring through the roof on Tuesday, after the company announced good news regarding its T2SARS-CoV-2 Panel, a test kit that can detect the SARS-CoV-2 virus that causes COVID-19. The diagnostic test maker's stock is up by 15.9% as of 11:49 a.m. EST, after jumping by as much as 38.8% earlier in the day.

So what

There have been new variants of the SARS-CoV-2 virus discovered in countries such as the U.K., South Africa, and the U.S. These variants present a challenge to our strategy to end the pandemic: It isn't clear whether existing diagnostic tests can detect them, nor do we know with certainty whether the vaccines that have been approved for COVID-19 will be effective against them. 

Fortunately, T2 Biosystems claims that its T2SARS-CoV-2 Panel can in fact detect these mutated strains of the virus. The test was first granted emergency use authorization by the U.S. Food and Drug Administration in August after it had demonstrated 100% specificity and 95% clinical sensitivity.

Nurse holding test tube filled with blood for coronavirus testing

Image source: Getty Images.

In a recent analysis, more than 42,000 genome sequences for the SARS-CoV-2 virus were evaluated for alignment with T2 Biosystems' diagnostic test. The analysis showed that the T2SARS-CoV-2 Panel should detect 99.99% of all SARS-CoV-2 viruses. John Sperzel, T2 Biosystems' CEO, said, "As new strains of the COVID-19 virus emerge, it is critical that we ensure our technology continues to be an effective diagnostic solution during the ongoing pandemic. I'm proud that we can confidently say, after extensive analysis, that our T2SARS-CoV-2 Panel, which has demonstrated clinical sensitivity of 95 percent and specificity of 100 percent, can continue to help impact lives by detecting multiple variants of the SARS-CoV-2 virus."

Now what 

The market for COVID-19 diagnostic test kits is already large and is expected to continue to grow in the coming years. Those tests that can detect new variants of the SARS-CoV-2 virus will obviously have an advantage over those that can't. Since T2 Biosystems' test has been proven to detect mutated strains of the virus, investors have high hopes for it.

However, many other companies compete in this market, including such giants as Abbott Laboratories and Roche. The success of T2 Biosystems' T2SARS-CoV-2 Panel will depend, in part, on whether existing diagnostic test kits developed by these other companies can also detect mutated strains of COVID-19. In short, it might be worth keeping an eye on this healthcare stock

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

T2 Biosystems, Inc. Stock Quote
T2 Biosystems, Inc.
TTOO
$0.53 (-9.71%) $0.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
624%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/04/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.