Guru Julian Robertson (Trades, Portfolio) is a billionaire investor and founder of Tiger Management, which netted an average return of 32% from 1980 to 2000.
On June 29, Robertson more than doubled his stake in health care company T2 Biosystems Inc. (TTOO, Financial), purchasing 1,256,638 shares for $8.39 per share.
T2 Biosystems is also traded in Germany.
T2 Biosystems is an in vitro diagnostics company that has developed an innovative and proprietary technology platform that offers a rapid, sensitive and simple alternative to existing diagnostic methodologies. The company uses its T2 Magnetic Resonance platform, or T2MR, to develop a broad set of applications aimed at lowering mortality rates, improving patient outcomes and reducing the cost of health care by helping medical professionals make targeted treatment decisions earlier.
T2 Biosystems has a market cap of $129.19 million, an enterprise value of $100.19 million, a P/B ratio of 3.68 and a quick ratio of 4.13.
T2 Biosystems has a 4/10 financial strength rating and a 4/10 profitability and growth rating with one severe warning sign:
- The company is possibly a manipulator of its financial results. T2 Biosystems has a Beneish M-Score of 7.82, which is higher than -2.22, implying that it might be a manipulator of its results.
Since Robertson increased his holding, the share price for T2 Biosystems has taken a nosedive dropping $3.07 and leaving Robertson with a -37% loss thus far on his investment.
Below is a Peter Lynch Chart for T2 Biosystems.
It is possible that Robertson decided to more than double his holding in T2 Biosystems because the company has two FDA approved products and it has since been applying for more of its products to be approved.
According to the company's most recent 10-K filing:
On Sept. 22, 2014, we received market authorization from the U.S. Food and Drug Administration, or the FDA, for our first two products, the T2Dx Instrument or T2Dx and the T2Candida Panel, which have the ability to rapidly identify the five clinically relevant species of Candida, a fungal pathogen known to cause sepsis. We have launched the commercialization of the T2Dx and T2Candida in the U.S. and we have built and continue to expand a direct sales force that is primarily targeting the top 450 hospitals in the U.S. that have the highest concentration of patients at risk for Candida infections.
T2 Biosystems further wrote that it has applications that are focused on sepsis infections, hemostasis and Lyme disease:
Our next three diagnostic applications are called T2Bacteria, T2HemoStat, and T2Lyme, which are focused on bacterial sepsis infections, hemostasis and Lyme disease. In late 2015 we initiated the collection of patient blood samples to support clinical trials for T2Bacteria, and we plan to initiate clinical trials for T2HemoStat in 2016. We expect that existing reimbursement codes will support our sepsis, hemostasis and Lyme disease product candidates, and that the anticipated economic savings associated with our sepsis products will be realized directly by hospitals.
The company then states that sepsis is one of the leading causes of death in the U.S. and according to data published by the U.S. Department of Health and Human Services for 2011, the cost of sepsis is over $20 billion in the U.S., or approximately 5% of the total aggregate costs associated with domestic hospital stays.
Sepsis is one of the leading causes of death in the U.S., claiming more lives annually than breast cancer, prostate cancer and AIDS combined, and it is the most expensive hospital-treated condition. Most commonly afflicting immunocompromised, critical care and elderly patients, sepsis is a severe inflammatory response to a bacterial or fungal infection with a mortality rate of approximately 30%. According to data published by the U.S. Department of Health and Human Services for 2011, the cost of sepsis is over $20 billion in the U.S. or approximately 5% of the total aggregate costs associated with domestic hospital stays. Sepsis is typically caused by one or more of five Candida species or over 25 bacterial pathogens, and effective treatment requires the early detection and identification of these specific target pathogens in a patient’s bloodstream. Today, sepsis is typically diagnosed through a series of blood cultures followed by post-blood culture species identification.
It is possible that Robertson believes T2 Biosystems may have a solution or a cure for sepsis infections, hemostasis and Lyme disease in the future. These could potentially be the reason that he decided to more than double his holding.
Cheers to your investment success.
Disclosure: Author does not own any shares of this company.
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