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.
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.
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."
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.