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by Michael Shulman
BiotechBlitz



Sounds cold, but how can you make money on the superbug that is now scaring school administrators and public health officials all round the country?

It's a big market – an article published this week in Journal of the American Medical Association said about 17,000 people die form MRSA each year, about 90,000-95,000 are infected. There are not many investment opportunities – but some background first.

MRSA, which stands for Methicillin-resistant Staphylococcus aureus (MRSA), is the killer super bug found in hospitals but now spreading to schools, gyms and other places where people sweat, spill blood and congregate. The disease is treatable, especially when caught very early, but is highly resistant tro conventional anti-biotics. The standard of care as things progress is a drug called Vancomycin.

On Oct. 1, Medicare said it would stop paying for hospital mistakes, including hospital-based infections, except MRSA, as the industry said it was too hard to eradicate. That's nonsense. Many European countries have very-low incidences of MRSA and the Verterans Affairs is rolling out a national program based on a pilot program that reduced it by roughly 75%. That being said, the Medicare changes put infecitons on everyone's radar, and now that a teenager has died in Virginia (outside of our nationa’s capital) people are taking notice.

Where to invest? Some options:

Testing: You have to test to find the bug and get rid of it, and hospitals are ramping up testing for MRSA, led by the VA. Look at Cepheid (CPHD), it dominates this market and has tripled already.

Treatment: Vancomycin is not really investable but new verisons of Vancomycin and other new antiobiotics might be. Check out Basilea – it is working on an antiobiotic called Ceftobiprole in partnership with a Johnson & Johnson (JNJ) subsidiary. The drug is in late stage trials for infections and is pending approval for severe skin infections.

Cadence (CADX): This recent IPO is working on an ointment, sort of, that would be applied when a catheter is inserted, and it heads off infections. Catheter infections are now going to be paid for by hospitals, not Medicare (and probably other payors will refuse as well), so there will be a great deal of interest once it gets approval, if it does in late 2009 or early 2010.

Can you imagine how active MRSA will all get once the tort lawyers discover it?




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