Why OraSure Technologies, Inc. Shares Jumped

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What: Shares of OraSure Technologies (NASDAQ: OSUR  ) , a marketer of oral-fluid diagnostic tests and specimen collection kits, surged by as much as 15% after a proposal from the Centers for Medicare and Medicaid Services announced yesterday suggested that Medicare and Medicaid be allowed to cover hepatitis-C tests in select patients.

So what: The CMS is suggesting that Medicare and Medicaid cover the costs for an HCV screening for high-risk individuals, which includes, according to the CMS' memo, persons born between 1945 and 1965, persons with a history of blood transfusion prior to 1992, and persons who have used illicit injectable drugs. Since OraSure develops a rapid diagnostic test for HCV, its shares have taken off in accordance with that proposal.

Now what: I see personalized medicine via diagnostics being a huge growth opportunity during the next decade, and OraSure is certainly sitting in the sweet spot following yesterday's proposal from the CMS. It remains to be seen, of course, if it gets adopted. However, if it does, it could quickly add to OraSure's top- and bottom-line figures, and should get baby boomers in to see their doctors. Patients are very fickle when it comes to out-of-pocket payments, so covering a vast majority, or all, of the cost of an HCV test could certainly put some pep in OraSure's figures. This is a development worth keeping your eyes on!

OraSure may be surging today, but even it could struggle to keep up with this top stock in 2014
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Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

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8/28/2015 4:00 PM
OSUR $5.37 Up +0.12 +2.29%
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