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A New "Superbug" Test... Just in TimeBy Rob Fannon, editor Phase 1 InvestorFriday, January 18, 2008 Becton Dickinson just won the superbug race.
Two weeks ago, the FDA approved Becton Dickinson's two-hour diagnostic test for methicillin-resistant Staphylococcus aureus, also known as the MRSA "superbug." The approval makes BD the first company to offer a product in the diagnostics market's next big growth segment – hospital acquired infections.
As we covered in the July 27 issue of Growth Stock Wire, the superbug is a hardy bacterium that can wreak havoc in hospitals and other medical settings. It can live on surfaces for up to a few weeks or lie dormant in infected patients without signs or symptoms. MRSA infections can be fatal, and treatment runs about $40,000 for those patients that do survive.
With estimated costs of $30 billion annually and 90,000 deaths per year, hospitals have a big incentive to stop infections at the door... and fast. Just yesterday, researchers reported the disturbing emergence of a rogue strain of MRSA called USA300 – it's one of the most drug-resistant bacterial strains ever discovered.
BD's superbug test shortens the current two-day wait for results to 120 minutes. It will transform the way hospitals identify and track infections, preventing unnecessary deaths and saving millions of dollars.
As I predicted last summer, BD's new superbug test has meant a windfall for its shareholders. BD stock reached an all-time high of $92 this week, making it one of the top 10 performers in the S&P 500 this year.
So far, Medical Investor readers are up more than 25% on the medical-supply giant.
Expect more of the same from BD in 2008... even with an economic slowdown in the U.S. More than 50% of the company's revenue comes from international markets. And BD's U.S. sales won't suffer from any pullback in consumer spending. There's no safer place to be invested in rough economic times than health care...
The Medical Investor portfolio is up an average of 10% over an average holding period of less than six months. How'd we do it? By taking advantage of the companies best positioned to rake in cash from the $2.4 trillion U.S. health care system. We're capitalizing on the biggest trends in medicine:
By sticking to The Medical Investor's central tenet – buying good businesses at the right price – we've produced steady returns in a rocky market... and have seen gains as high as 50% in less than a year on PPDI and Covance, our favorite contract research organizations.
And the best part about investing in our stocks is while the rest of the world is popping antacids every time a retirement fund statement shows up in the mailbox, we'll be sleeping easy.
Good investing,
Rob Fannon
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Medical stocks still climbing... Millennium Pharmaceutical, MGI Pharma, and Covidien at new highs.
Bond insurers get slammed... Ambac and MBIA face downgrades, hit 15-year lows.
Global infrastructure boom stumbles... Martin Marietta, Cemex, Texas Industries, Alcoa, and Macquarie at new lows.
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