T2 Biosystems (NASDAQ:TTOO) shares have added about 400% in the last month as it became Wall Street’s latest struggling stock to gain meme status.
But what is it and why has it captured the attention of meme stock traders?
What is T2 Biosystems?
Lexington, Massachusetts-based T2 Biosystems develops in vitro diagnostics tools targeting sepsis, hemostasis, bacteria, and Lyme disease for hospitals and laboratories. Its tools are powered by its T2 Magnetic Resonance detection technology which can identify a range of molecular targets direct-from-blood.
The company’s mission is to reduce the number of deaths caused by sepsis, the body’s extreme response to an infection, which T2 Biosystems says results in more deaths per year than breast cancer, prostate cancer, and AIDS combined.
Its T2Bacteria and T2Candida Panels run on the automated T2Dx Instrument and are the only Food and Drug Administration (FDA) approved blood tests that can identify sepsis-causing pathogens within three to five hours, eliminating the need to wait for a blood culture which can take one to five days.
The company has a number of other diagnostic tools in development, including its T2Cauris Panel, designed to detect the emerging fungus Candida auris, which marked the company’s third product to receive FDA Breakthrough Device designation.
Why has the stock skyrocketed?
T2 Biosystems shares took off in early August after investors learned on July 31 that it had been granted an extension to comply with the Nasdaq’s minimum bid price of $1 and market value of listed securities requirement of at least $35 million.
The company regained compliance with the minimum market value requirement on August 7, 20203, which marked the 10th consecutive trading day when its market value was at least $35 million.
The rally in its shares has been propelled by meme stock traders, who are bullish on the stock given its potential upside should more of T2 Biosystems’ diagnostics tools win FDA approval in future, according to their discussions on social media platform Reddit.
What’s next?
T2 Biosystems is on track to snap its three-day winning streak on Wednesday, with the stock falling 10% to US$0.53 in the early afternoon.
Despite the setback, the stock is more than halfway to the $1 share price required for it to regain compliance with the Nasdaq’s minimum bid price by its November 20, 2023, deadline.
Contact the author at emily.jarvie@proactiveinvestors.com
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