A Super Superbug Testing Market
By
Brian Orelli
January 3, 2008
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There's nothing like the word "superbug" to get investors excited. Yesterday, while almost everything else was getting pounded, Becton, Dickinson (NYSE: BDX) was up almost 4% on word that the FDA had approved its GeneOhm MRSA quick blood test for the so-called superbug.
The test analyzes patient blood samples to identify both the Staph bacteria and its deadly antibiotic-resistant cousin, methicillin-resistant Staphylococcus aureus (MRSA). It can give doctors a definitive answer in two hours instead of the traditional culture method, which takes days.
The shorter time should not only help patients get the correct antibiotics more quickly, but also might increase usage of the test in borderline patients, thus increasing the market. As it is now, four states require screening for the superbug in high-risk patients upon hospital admission. The California Legislature is considering requiring this, as well.
BD's test is the first FDA-approved test for MRSA in blood. BD currently sells a MRSA test for detecting the bacteria in nostrils using the GeneOhm system. The beauty of the system is that BD can sell hospitals the $35,000 machine and then capture related markets by selling different tests that run on the machine. BD also sells a test for StrepB and is developing more tests for the GeneOhm system to detect other antibiotic-resistant strains as well as other bacterial and fungal infections.
The frequent use of antibiotics, combined with some patients not taking their full course of medication, has created a rash of health-care-associated infections -- and a market where there wasn't one just a few years ago. Being first to market with a blood test will hopefully help BD sell more machines, which should drive sales of its other tests and help it compete against other MRSA detection tests made by Cepheid (Nasdaq: CPHD) and Bio-Rad Laboratories (AMEX: BIO).
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