Diagnostics companies jump into rapidly growing market for point-of-care superbug tests

As the number of drug-resistant superbug infections continues to rise, diagnostics companies are rolling out rapid, point-of-care devices that can quickly identify infectious bacteria and potentially cut down on the need for unnecessary antibiotics, cashing in on a growing market for the tools.

The market for point-of-care diagnostics for infectious disease rings in at $533 million and is growing 7% a year, Frost & Sullivan analyst Divyaa Ravishankar told the WSJ. And for diagnostics makers with related tests, this could translate into a big opportunity.

"There's always been a desire by hospitals and government agencies to minimize the use of antibiotics. But the problem was that there wasn't a technology available," Raymond James analyst Nicholas Jansen told the newspaper.

Companies making the tools are rushing to market, unveiling new devices that respond to a growing trend and snatching up businesses to expand their portfolio. Sunnyvale, CA-based Cepheid ($CPHD) was at the forefront of the action, launching in 2007 a one-hour MRSA test. The product, which runs at about $40, is more expensive than a slower lab test that costs about $1. But Cepheid found a market for its tool, convincing "hospitals they'd save money in overall costs of care by stratifying patients," Leerink Partners analyst Dan Leonard said, as quoted by the WSJ.

Diagnostics giant Roche ($RHHBY) also sees big potential in rapid drug-resistant bacteria tests. In August, the company snatched up superbug testing outfit GeneWEAVE BioSciences for $425 million to get its hands on GeneWEAVE's Smarticles technology. The products pinpoint drug-resistant bacteria by making them shine if an antibiotic is present.

Some companies are facing a more difficult path with their products. Waltham, MA-based Alere ($ALR) rolled out its rapid diagnostic for chest infections 10 years ago, and the tool is used in fewer than half of European countries despite evidence in its favor, the WSJ reports.

Plus, costs can be a barrier to entry for companies developing the tests. Diagnostics makers have to shell out about $50 million to market and sell a new product, which is about the same price it takes to develop a test in the first place, according to analysis by health consultancy Diaceutics, cited by the newspaper.

But U.S. and U.K. groups are eager to jump-start innovation, awarding prizes and grants totaling about $36 million for rapid diagnostics for drug resistant bacteria. In April, the U.S. National Institutes of Health (NIH) funneled more than $11 million toward 9 research programs developing rapid diagnostics for antimicrobial resistance. In July, the NIH awarded more than $5 million over 5 years to Great Basin Scientific and Brigham Young University to create a rapid molecular diagnostic test for carbapenem-resistant Enterobacteriaceae (CRE).

- read the WSJ story (sub. req.)

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