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Cepheid Reaffirms Financial Guidance in Wake of Swiss MRSA Study

NEW YORK (GenomeWeb News) – Cepheid today reaffirmed its previous 2008 financial guidance for revenues of between $182 million and $189 million and net income of between $3 million and $5 million, following a published study questioning the effectiveness of methicillin-resistant Staphylococcus aureus screening.
 
Cepheid’s business has been built primarily on sales of its GeneXpert multiplex diagnostics instrument and MRSA assay. While a large part of its business has come from MRSA screening programs at hospitals within the Veterans Administration, the firm said recently in its fourth-quarter conference call that an increasing percentage of its sales is coming from hospitals outside the VA network, as a growing number of states pass legislation for MRSA surveillance.
 
For full-year 2007, Cepheid’s revenues increased 48 percent to $129.5 million from $87.4 million in 2006.
 
The study, which was published online today in the Journal of the American Medical Association, suggested universal screening does not significantly reduce hospital-acquired MRSA infections in surgical patients. The study was conducted over a nearly two-year period at the University of Geneva Hospitals in Switzerland.
 
In response to the study results, Cepheid CEO John Bishop posted a letter on the company’s website saying that the conclusions of the study were “not surprising,” considering “the institution had already achieved an infection rate of less than 1 percent. However, applying the same conclusions to environments where the rates of infection may be in excess of 8 percent or more … may be problematic.”
 
The test used in the Swiss study was not Cepheid’s or a rival test sold by Becton Dickinson, but rather a home brew. As Bishop pointed out in his letter, the test used in the study required an average of 22.5 hours to provide results, whereas Cepheid’s Xpert MRSA test, which was cleared by the US Food and Drug Administration in April 2007, can provide results in 72 minutes.
 
“This time-to-result is critical for reducing infection rates in hospitals,” said Bishop.
 
In addition, he said that since 57 percent of patients in the Swiss study incurring infections were not colonized with MRSA upon admission, “it would seem to be clear that the patients’ resulting infections were a consequence of a failure in the hand hygiene and barrier precaution programs which might have been improved had the patient been identified as colonized earlier.”
 
Bishop also pointed to published studies over the past decade that show “overwhelming support for the addition of active surveillance programs as part of an overall program to reduce MRSA infections.”
 
In Wednesday trade on the Nasdaq, Cepheid’s shares closed down 3.4 percent at $23, while Becton Dickinson’s shares on the New York Stock Exchange closed up 1.8 percent at $86.39.

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