The holiday season is over. Tax season is weeks away. And here we are stuck in the middle of the flu season.
It’s a bad one this year. One of the worst on record.
The Centers for Disease Control (CDC) reports flu-caused hospitalizations are 30% higher than last flu season and more than double the season before that.
There are stories everywhere. A hospital in Missouri cut back on its scheduled surgeries to accommodate surging flu-related visits. In California, pharmacies are rationing prescription-based flu treatments. And we’re still just halfway through the flu season.
But a new technology is setting to have a big impact on flu sufferers. It already helped drive one stock up more than 1,000% higher. And it’s now a matter of time before you never get hit hard by the flu again.
The End of the Flu Vaccine
Although only half way though the flu season, the CDC has already officially called this year’s flu an epidemic.
It’s bad. But it won’t be bad forever. Here’s why.
For decades the only solution to the flu was prevention with the flu vaccine.
The vaccine, however, is just not good.
Every year the U.S. Food and Drug Administration (FDA) watches global surveillance footage, listens to expert recommendations from the World Health Organization, trying to get the vaccines right.
Experts then vote on which four flu strains -- from each of the “A” and “B” virus types -- it expects to be the most dominant that year. They then make recommendations to manufacturers. Then wait and hope they’re right.
This year they weren’t even close to being right. The flu vaccine is less than 50% effective.
As a result, as many as 20% of Americans will suffer from the flu by the time the season is over. That works out to more than 60 million cases of the flu.
It’s a big problem and an equally big opportunity.
You see, the flu is actually treatable. When you catch it, all it’s effects can’t be eliminated. But they can be greatly reduced through rest and antiviral treatment it’s caught within the first 48 hours.
That 48-hour window is where some companies are are focusing their flu detection efforts and it’s paying off big.
To identify the flu strain, doctors primarily use rapid flu tests. These tests analyze the antibodies the body is naturally using to fight off the flu.
Nine million of the tests are administered every year. At $40 a test, we are looking at a total market size of $360 million this year.
For that price tag, you’d expect highly accurate testing. But they’re not. Not even close. They’re only accurate about 50% to 70% of the time.
A new breed of test is changing all that. It’s far more accurate, more effective, and an all around better value than the current standard.
For example, the FDA is now allowing doctors and hospitals to use Alere’s (ALR) Influenza A&B nucleic acid-based molecular diagnostics test – once only used in labs – to detect the genetic makeup of the flu strain.
What’s nice about this test is it can get great results because it “detects the RNA of flu virus, not just antibodies as do most tests,” notes the Boston Business Journal.
It’s designed to tell the difference between influenza A&B in less than 15 minutes using just a nasal swab to identify molecular DNA and RNA.
Better yet, this test also has up to 99.3% sensitivity with the “A” strain and 98.9% with the “B” strain.
That’s a real test with real results. Not the 50% to 70% standard before with the antibody test.
But I realize it’s a new technology. And in healthcare, new technologies take years to be approved and make their way onto the market.
That’s where we expect this year’s bad flu season is accelerating growth for flu-related detection.
Getting Out of the Way
Again, back to Alere. It has successfully attained the FDA waiver under the Clinical Laboratory Improvement Amendments, or CLIA.
With that, it can now bring the test outside of the lab to hospitals and clinics, opening the opportunity to grow the molecular diagnostic footprint in the flu market faster than it would otherwise.
It now has the potential to be used in thousands of hospitals and clinics to help in flu seasons as bad as we’re in right now.
Having the ability to tell precisely what a patient is dealing with, with an ability to treat it effectively in faster time is an amazing opportunity in all diseases and conditions, not just the flu.
And it proves once again how important molecular diagnostics will be throughout healthcare in the years ahead.
Molecular diagnostics is cost effective. It cuts down on wasted money and time. And it’s better for doctors and patients.
It may still be in the early stages of growth, but it’s making detection and treatment options easier.
That can’t be overlooked. What’s going on in the flu treatment market right now is proof of what’s to come for molecular diagnostics.
Best of all, there are huge gains to be had in the sector. Alere is just one example. Although it’s up 130% in a little more than two years (more than triple the S&P 500), it’s just one winner.
Another molecular diagnostics stock with a flu test, Cepheid (CPHD), is up more than 1,000% in in less than six years.
There are many more examples too. In the years ahead, molecular diagnostics will provide many more Alere’s and Cepheid’s for those looking at the sector now.