T2 Biosystems ($TTOO), a month after launching its IPO, won FDA approval to market a new kind of test to quickly identify Candida, a bloodstream infection that can cause sepsis.
Regulators gave their OK to the T2Candida Panel and the T2Dx Instrument panel to test for Candida. The whole test system delivers a result in about four hours, a big improvement over the current testing standard that takes between two and 5 days to deliver results.
The FDA milestone, which became public early afternoon on Sept. 22, seemed to please investors. T2's stock closed at $16.93, up 4.7% over the previous day's trading. In after-hours trading, the price surged another 2% to $17.28, and jumped 20% early on Sept. 23.
In early August, the company raised just over $57 million (5.2 million shares at $11 each). That was well below its initial projections, which included plans to raise as much as $68 million through selling 4 million shares between the $15 and $17 price range. While the initial price lagged, T2's stock price peaked this summer at $23.21on Aug. 29.
T2, a 2012 Fierce 15 company, has big expectations for T2Candida, which could greatly reduce Candida-related mortality by spurring much quicker diagnosis and treatment. T2 cites studies that show the test and related therapy, if performed quickly, is poised potentially slash mortality rates from 40% to 11%. Such test could also lead to clearer diagnoses, and with earlier intervention, lower medical costs.
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| John McDonough, CEO of T2 Biosystems |
FDA approval is one thing. Getting hospitals and patients to embrace a new diagnostic test is something else. But President and CEO John McDonough said in a statement included in the approval announcement that T2 is gearing up for that next phase.
"We believe the diagnostic capabilities offered by these products can support both improved clinical outcomes, as well as strong economic benefits," McDonough said. "We look forward to working closely with the medical community to bring this novel diagnostic test to hospitals, physicians and patients."
- read the release
- here's Xconomy's coverage of T2's IPO
Special Report: FierceMedicalDevices' 2012 Fierce 15 - T2 Biosystems