) recently gained the U.S. Food and Drug Administration (FDA)
approval for the commercialization of its Xpert MRSA/SA Blood
Culture (BC) test. The test, which runs on the company's flagship
GeneXpert System, is already available in Europe.
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The Xpert MRSA/SA BC test will be used for examining
(SA, typically methicillin susceptible) in blood culture bottles
showing gram-positive cocci in clusters in an hour. The
commercialization of Xpert MRSA/SA BC test is expected to improve
clinical outcomes for patients who suffer from these bloodstream
Cepheid's Xpert MRSA/SA BC test can detect and distinguish MRSA
and S. aureus within one hour. This is likely to improve clinical
results as it will reduce the risk of MRSA transmission in
hospitalized patients. Additionally, the rapid detection should
lower the probability of spreading the infections in the hospital
The blood culture specimen will be put through Cepheid's updated
Xpert MRSA/SA BC test to detect whether it is infected with MRSA
or SA. These bacteria are the leading cause of hospital-acquired
sepsis, a life-threatening medical condition. Considering that
sepsis is one of the leading causes of death in the U.S.,
Cepheid's updated Xpert MRSA/SA BC test has a sizeable market
Based on statistics from Centers for Disease Control and
Prevention (CDC), S. aureus (including MRSA) is one of the most
widespread central line-associated bloodstream infections,
particularly in hospitals. According to an article published in
Infect Control Hosp Epidemiol
this year, the infection along with coagulase-negative
staphylococci (CoNS) account for roughly 24% of all central line
The expansion of the company's healthcare associated infections
(HAI) portfolio is encouraging. The addressable market should
expand for Cepheid on the back of commercialization of the
updated Xpert MRSA/SA BC test.
As bloodstream infections are a nationwide health issue, the
company will make headway into a lucrative high-volume market.
The updated test should also increase Cepheid's hospital
penetration in the U.S.
The company expects to launch a gamut of tests in the U.S. as
well as the overseas market in 2013. In our opinion, test menu
expansion is a significant growth catalyst for this molecular
Currently, the stock carries a Zacks Rank #3 (Hold). While we
remain on the sidelines for Cepheid, we are positive about
Natus Medical Inc.
). The stock carries a Zacks Rank #1 (Strong Buy).
Heartware International Inc.
), carrying a Zacks Rank #2 (Buy), are also worth considering.