Who Is Paying Attention To MRSA?

Includes: MRK, NBY
by: Roy Smith

Methicillin-resistant Staphylococcus aureus (MRSA) is a bacterium, first discovered in 1961, that causes infections in various segments of a patient's body. MRSA, sometimes called the "Super Bug" in the medical community, has been established as an affliction that is much more complex and difficult to treat than most strains of staphylococcus aureus -- or staph -- because it's resistant to some commonly used antibiotics. Staph has been around for many years and go-to treatments have, in the past, been effective. However, records indicate that these same antibiotics (methicillin, amoxicillin, penicillin, oxacillin) are no longer as effective, thus creating a severe problem for the medical community and patients who have developed MRSA, which can be quickly fatal if left untreated. Symptoms of the disease are conditional, depending on where the body is affected by the disease. In many cases, mild skin infections, like sores or boils, may be apparent. In more serious cases, advanced skin infections from surgical wounds that become infected, may enter the patients bloodstream, lungs, and sometimes even the urinary tract causing further complications.

Staph becomes a big problem when it manages to get into the body, in many occurrences through dry skin-cracks, a cut or open wound where it subsequently develops into an infection. While Staph is one of the most common causes of skin infections in the U.S., many instances are minor, do not require special treatment and can generally be treated with antibiotics. But over the decades, some strains of staph - like MRSA - have become resistant to antibiotics that once destroyed it. While some antibiotics are still effective, MRSA seems to be evolving and constantly adapting to its attempted treatments. The disease is spread by contact with humans or contact with objects that have the bacteria on it. MRSA is carried by about 1% of the population, although most of them aren't infected. People with weak immune systems and who are in hospitals, nursing homes, and other heath care centers are prime targets. Infections can appear around surgical wounds or invasive devices, like catheters or implanted feeding tubes. Rates of infection in hospitals, especially intensive care units, are rising throughout the world. In U.S. hospitals, MRSA accounts for more than 60% of staph infections.

Of special concern, MRSA is also showing up in relatively healthy people who have not been hospitalized. Examples are people that share close quarters such as athletic teammates and prison inmates. This type of MRSA is called community-associated MRSA, or CA-MRSA. The Center for Disease Control and Prevention (CDC) reports that in 2007, 14% of people with MRSA infections contracted them outside of a health care setting. Recent studies have shown that rates of CA-MRSA infection are growing also. A study published in The Journal of the American Medical Association, reported the average age of people with MRSA in a hospital or health care facility was 68. But the average age of a person with CA-MRSA was 23.

To understand another element of why MRSA and its derivatives have proliferated, one has to understand some economics of the pharmaceutical industry. Developing an antibiotic requires a substantial amount of Research and Development funds, and a multiple year, sometimes 10 year span, from lab to successful commercialization - if clinical trials and the FDA and international regulatory bodies are in approval. This is, of course, rewarded with a secured patent and then royalty sales for years to come, thus making the risk and investment worthwhile for the company and its investors. And therein lies the problem. Ten or more years ago, as patents began to expire and generics took hold, drug firms began to look more carefully at their investment targets. One that does not seemingly play out for them is investing in developing new antibiotics that treat infections such as Staph and MRSA. As a result two important situations obviously occur. First, there are a minimal amount of drugs for treating serious infections such as MRSA, leaving patients and the medical community in a precarious position. Second, some small biopharma firms have picked up the ball and are attempting to move forward with drug development efforts (ironically sometimes partnering with big pharma to do so), but only after stage I and II clinical trials have been positive, thus indicating a very positive chance for success and future commercialization. In other words, big pharma has stayed out of the lab and the expense associated with it, but will shell out some of the funds in its deep pockets if a potential drug reveals itself in late stage development process.

Several small biotechs have made progress. These include Novabay Pharmaceuticals (NYSEMKT:NBY). The company has partnered with Galderma S.A to develop NVC-422, an anti-infective drug. NVC-422 is geared for the treatment of impetigo, a highly contagious skin infection that can become deadly when leading to MRSA. Steady progress on the development of the drug has been reported between Novabay and Galderma, including a recent milestone payment of $2.6 million.

Biopharmaceutical company Trius Therapeutics (TSRX) is also very active on the MRSA front with its Tedizolid product, the company's lead product candidate for treatment of serious gram-positive infections, including those caused by MRSA. In December of 2011, the company presented top-line results showing that tedizolid achieved all primary and secondary efficacy outcomes after a short course of therapy. In addition, they showed significant improvements in key safety and tolerability measurements in the complete study population versus linezolid (Zyvox®). This is the first of two registrational studies for tedizolid.

There are other drugs approved for MRSA that include Pfizer's (NYSE:PFE) Zyvox, Cubist's (CBST) Cubicin, Forest Laboratories' (NYSE:FRX) Teflaro, and a generic vancomycin, which has become the favorite since its introduction in 1958. Theravance's (THRX) Vibativ also is in the game.

It is well noted that MRSA is clearly a growing problem, indicated by further strains expanding to other non-hospital environments. The biopharmas vested in resolving this problem cannot be too crowded, with room for market share and profit in abundance. It is clear that all represent opportunities for investment with good potential returns.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.