Before you read this post, please know that I do not own this stock, although I do recommend it in my service. I'm exposing this because it's a hatchet job done on a product category that can save tens-of-thousands of lives -- and because a company's stock took a hit for no reason.

That company, Cepheid (CPHD), took a major hit yesterday after the close, due to an article in the Journal of the American Medical Association -- an article that should never have been published.

If it was vetted, then the people who agreed to its publication should check into a hospital that doesn't do any MRSA testing the next time they aren't well.

The article claimed that MRSA testing did not help reduce MRSA infections -- which of course is not only illogical but utter nonsense if you live in the real world.

The study at the core of the article was based in Switzerland (University of Geneva) and I have been told by sources that this hospital used home-brewed, home-built tests -- not a standard test from Cepheid or competitor Becton Dickinson.

There is a detailed criticism published by Betsy McCaughey, founder and chairman of the Committee to Reduce Infection Deaths, a not for profit with an obvious goal -- saving lives. Her critique is found below, verbatim. The organization's website is www.hospitalinfection.org.

Let's cut to the chase. The AMA article is quasi-science that is a short seller's dream.

For of you interested in the truth and the potential that MRSA testing has to save lives (and help companies succeed) look at the the Veterans Administration. The VA has arguably has one of the the toughest potential MRSA problems in the country, due to the nature of their patient population. It reduced MRSA infections by more than 70% with a pilot program that had MRSA testing at its core, and is now pushing that program nationwide. Cepheid has captured the vast majority of the testing business at the VA.

Last point -- some unsolicited, non-stock advice: Don't go to any hospital for any procedure that doesn't first include comprehensive MRSA testing. No one in my family will. Am I paranoid? No. A teacher in the school situated next door to my son's high school died a few months back. She was diagnosed with a malady other than MRSA and was sent home. Then she died of MRSA. MRSA is real and it's deadly.

Enough said, read the letter from Betsy McCaughey.

This is the rebuttal letter -- verbatim -- by Ms. McCaughey. I hope she doesn't mind my posting it here. If you do Ms. McCaughey, contact me and I will pull it down.

March 11, 2008
New York, New York

JAMA Article Provides False Support for CDC's Do-Nothing Position on MRSA

A new study in the Journal of the American Medical Association (JAMA) purports to show that screening for MRSA (methicillin-resistant Staphylococus aureus), a simple skin or nasal swab, is not effective in reducing MRSA hospital infections ("Universal Screening for Methicillin-Resistant Staphylococcus aureus at Hospital Admission and Nosocomial Infection in Surgical Patients," JAMA vol. 299, no. 10, March 12, 2008).

The findings of the authors will be seized upon by the Centers for Disease Control and Prevention (CDC) and advocates of the do-nothing status quo. But the study is seriously flawed - rendering is findings meaningless.

1. Researchers used a 'rapid test,' but many patients were not tested until they had already been in the hospital for twelve hours. Furthermore, the results of the MRSA tests were not acted upon for another 22½ hours on average. Most patients had completed more than half of their hospital stay before their results were known. Therefore, the precautions they needed - isolation, proper antibiotics, chlorhexidine baths - were taken late or not at all.

2. Unbelievably, almost a third of surgical patients (31%) who tested positive didn't get their test results until after their surgery. Therefore they too didn't receive any of the precautions they needed. Some people carry MRSA germs in their noses or on their skin without realizing it. The bacteria do not cause infection unless they get inside the body - usually via a catheter, a ventilator, or an incision or other open wound.

3. No weekly MRSA testing was conducted, which is de rigueur when conducting universal screening to prevent patients colonized with MRSA from passing it on to other patients in the hospital.

4. A previous study by the same lead author at the same location, The University of Geneva Hospital, found that universal screening on admission with preemptive contact precautions (the way it's supposed to be done) decreased MRSA infections in the medical intensive care unit.

The study released today, says Betsy McCaughey, Chairman of the Committee to Reduce Infection Deaths, "doesn't prove that MRSA screening is ineffective. The study omits the precautions that are supposed to follow a MRSA positive test result. It's like testing a recipe, but omitting half the ingredients or test-driving a car without the tires."

Today's JAMA article provides false support for the CDC's persistent do-nothing position on the dire problem of M.R.S.A. The CDC's lax guidelines continue to give hospitals an excuse to do too little.

Chairman and founder of the Committee to Reduce Infection Deaths and former Lieutenant Governor of New York State, Betsy McCaughey is available for interview immediately at:
917-748-0227 or 212-534-3047
www.hospitalinfection.org