initial public offerings (IPOs) trading on American exchanges

Thursday, August 7, 2014

T2 Biosystems (TTOO) began trading on the Nasdaq on Thur 7 Aug 2014

Sector: Healthcare
Industry: Diagnostics & Research
Founded in 2006
Headquartered in Lexington, Massachusetts

The Lexington, MA-based company priced well below its projected range, raising about $57.2 million before paying its underwriters. T2 aimed to raise as much as $68 million by selling 4 million shares at between $15 and $17 apiece. Instead, the company will debut on the Nasdaq this morning after selling 5.2 million shares at $11 apiece. It’ll trade under the ticker symbol “TTOO.”

Broad Street Principal Investments held 18.1 percent of T2 before the offering. Polaris Partners and Flagship Ventures each owned 16.9 percent of the company. Aisling Capital (14.7 percent), Flybridge Capital Partners (9.9 percent), and Physic Venture (6.6 percent) also held sizeable stakes.

T2 has raised more than $110 million in private equity financing since its inception in 2006. The company has burned through about $98 million in that time.

T2 Biosystems was started up by a big cast of business people and researchers from MIT (Tyler Jacks, Bob Langer, Michael Cima) and Massachusetts General Hospital (Ralph Weissleder and Lee Josephson). They came up with a bench-top machine that uses miniaturized magnetic resonance detection and magnetic nanoparticle probes to identify biological substances like proteins, small molecules, viruses, and DNA. T2’s pitch is its system can do this much more quickly and cheaply than traditional optical-based machines. T2 says, for instance, that its tests can help clinicians identify sepsis in a matter of hours, rather than the multi-day turnaround time it would take to use a blood-based diagnostic, and that quicker diagnosis will save lives, and lead to shorter hospital stays and cost savings.

T2 is initially using its product to help diagnose sepsis and hemostasis, and has already filed an application with the FDA to approve its first products, the T2Dx diagnostic and T2Candida panel, which are used to identify species of a pathogen known to cause sepsis. It aims to begin selling those in the U.S. in the first half of 2015. The next two applications for its technology are focused on bacterial sepsis infections and hemostasis—T2 will start clinical trials for those applications in the second half of 2015 and early 2016, respectively.

The big questions for T2, as with many diagnostics companies, are adoption and reimbursement. T2 says in its prospectus that it’s surveyed 111 “decision-makers involved with laboratory purchasing” and based on the results, believes it can sell the T2Candida for between $150 and $250 per test. But none of its products are on the market yet, and when they are, T2 will face stiff competition from big, established companies like Beckton Dickinson, bioMerieux, and others.

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