[Dr. KSS writes about medicine and biotech stocks for the Irregulars. He has agreed to our trading restrictions, chooses his own topics, and his words and opinions are his own. Visit his Stock Gumshoe page to see his biography, latest comments and past articles.]
About 18 months ago, I came across tiny Boston-area diagnostics start-up T2 Biosystems ($TTOO). I asked my friend Glenn Newberry to take a look. T2 refers to a kind of image detection performed with magnetic resonance methods, but we’ve lovingly christened the company “Tattoo.” We agreed at the time that this could become one fulsome hot diagnostics play but that the time then wasn’t right, that the equity appeared overvalued, and that it needed a couple more milestones under its belt.
I got busy with other things, but Glenn, a master biotech hound, is amazing at tracking these stocks, clued into their vibes. Recently, we communicated again about Tattoo: he felt the time was right. After perusing the latest from $TTOO, I agreed and took a position.
We feel that Tattoo warrants your full attention now, and that subject to your own due diligence, it may warrant a spot in your portfolio. T2 is setting a blistering new standard in microbiological diagnostics that will literally force hospitals to adopt its methods or be left wanting and at risk for medical litigation, so superior are its methods. At Gumshoe Biotech, we’re often leery of medical diagnostics companies because the hurdles for them to really benefit shareholders are higher than for drug developers. But T2 is an exception, as you will soon see.
What you need to know about $TTOO:
(1) A routine event for hospitalized patients is that they become septic. Sepsis means having a germ in your blood, which is normally sterile. Why do patients become septic? Because of the things we do to them: iv lines that get infected, pneumonia that invades the bloodstream, bacteria from bladder catheters, bacteria from wounds, infected bones and heart valves that creep into the bloodstream. Not attended to promptly and definitely (read, with the right antimicrobial drugs), sepsis kills, often rapidly. Sepsis harms organs, particularly the kidneys, and can inoculate tissues with germs that form abscesses. Sepsis often inoculates uninfected tissues.
(2) Customary methods of diagnosing sepsis have changed little since the time of Louis Pasteur. Patient blood is ...