Cepheid’s CPHD Xpert Ebola Assay has been recently granted the Emergency Use Authorization (EUA) by the U.S. Food & Drug Administration (FDA). Xpert Ebola is a molecular diagnostic test used to detect the presence of Ebola Zaire Virus in one’s blood and has the ability to deliver results within 2 hours. The test runs in Cepheid's self-contained cartridge to minimize potential contamination.
As per the World Health Organization (WHO), Ebola causes an acute and highly contagious illness which can turn out to be fatal if left untreated. It is thought that the fruit bats of the Pteropodidae family are natural hosts of Ebola virus.
Although Ebola gained widespread attention in the 2014 epidemic that affected multiple countries in West Africa, the virus was first discovered in 1976 when two simultaneous outbreaks occurred in Sudan and in the Democratic Republic of Congo.
As of Feb 15, 2015, more than 23,000 individuals have been infected by Ebola and the virus has claimed over 9,000 lives. At present, the virus is raging havoc in parts of countries like Guniea, Liberia, Sierra Leone, Mali, USA and Spain.
So far no specific diagnostic test was available for the identification of the virus, which made it difficult for physicians to provide suitable treatment to many of the affected. Cepheid’s Xpert Ebola comes as a much-needed breakthrough as it detects the virus within 2 hours, facilitating fast and better treatment.
In Nov 2014, Cepheid declared the receipt of a grant of up to $3.3 million co-financed by the Paul G. Allen Family Foundation and the Bill & Melinda Gates Foundation to develop Xpert Ebola. Interestingly, Cepheid came up with the emergency-use-only version of the test from the initial prototype in just 90 days.
Currently, the Xpert Ebola Assay has been granted the EUA for use in U.S. laboratories certified by the Clinical Laboratory Improvement Amendments (CLIA) to perform moderate as well as high complexity tests or in similarly qualified non-U.S. laboratories. The company will initiate the shipping of the test in Apr 2015.
Management expects to deliver 10,000 Xpert Ebola test kits for field testing and potential training deployment later in the first quarter of 2015.
Currently, the company offers a range of 20 Xpert tests outside the U.S. and 16 in the domestic market, representing the broadest portfolio currently available on a single platform. With management expecting to launch more tests in the quarters ahead, these numbers are expected to reach 41 and 37, respectively, in the 2017–18 period.
These developments are likely to help Cepheid gain more investor attention going forward.
Currently, Cepheid carries a Zacks Rank #3 (Hold). Some better-ranked medical instrument stocks include ABIOMED, Inc. ABMD, Inogen, Inc. INGN and Edwards Corp. EW. While ABIOMED and Inogen sport a Zacks Rank #1 (Strong Buy), Edwards Lifesciences carries a Zacks Rank #2 (Buy).
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