Gram Positive Sepsis Test:
On October 12th, 2012 Dr. Emanuel Rivers referenced Nanosphere's (NASDAQ:NSPH) Gram Positive Sepsis test while making a speech at the University of Kentucky. The speech entitled "Improving Outcomes From Severe Sepsis and Septic Shock: From the Emergency Department, General Practice Floors to the ICU " featured Nanosphere on a slide as another revolution in treating sepsis (Author note: the presentation from the speech was not published. This reporting comes from multiple physicians attending the speech).
Dr. Rivers is best known as the lead researcher on the data that lead to the treatment "Early Goal -Directed Protocol of the Treatment of Severe Sepsis (EGDP)" or nicknamed the "River's Protocol".
Dr. Rivers is widely known as one of global experts in the treatment of sepsis. He is in no way affiliated with Nanosphere. It is a true feather in the cap of the company to have such a renowned expert reference their test during a university speech.
In the October 2012 edition of the Journal of the American College of Cardiology researchers published a study using Nanosphere's Verigene System to identify coronary artery disease patients whose bodies do not metabolize the drug, Plavix. The research found that using the simple Nanosphere rapid test, performed by a clinical nurse (with no genetic laboratory training), was above 99.9% accurate and in 100% agreement with a reference lab test. See the abstract here (http://content.onlinejacc.org/article.aspx?articleid=1383994).
The importance of this test lies with the fact that an estimated 30% of Caucasians, 40% of Africans, and 55%+ of East Asians do not metabolize the drug Plavix. In coronary artery disease patients this means they are not receiving benefit from the Plavix regiment and must be treated in an alternate fashion.
The company has been pushing this test through the FDA for some time. In June 2011 the FDA asked for more data from the company. The company has maintained throughout the FDA process that this test would be eventually approved. This research is peer-reviewed evidence that this test works and will eventually displace the current expensive and time-consuming reference lab test.
The company thinks this test will generate around $40,000 a year per placement but may be a driver of placements into cardiology segments. As the menu of cardiology test continues to develop in the pipeline the value of this segment will become a significant driver of value. I believe the company will eventually partner to continue the build out of the cardiology platform and keep the internal focus on the bacterium tests.
The company is set to report earnings at the beginning of November. Placements of the Verigene systems are expect to be between 40-60.
Disclosure: I am long NSPH. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.