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Lay off the grass: Texas football sees scary infections

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I was alarmed to read an article on Bloomberg early this Sunday morning about Texas high school football. While I am a recovering football addict, I still jump at the chance to even watch Pop Warner football on TV at 3 AM. But enough with my issues. There is something really serious going on in Texas and internationally with certain drug-resistant staph bacteria. This bacteria, a type that's plagued hospitals for decades, has made its way into the general population in recent years.

Without proper treatment, it can spread to internal organs and bones after reaching the bloodstream, causing organ failure. Texas faces a certain type of this bacteria with the acronym, MRSA.

Bloomberg reports that this MRSA has migrated to playing fields in Texas, particularly on artificial turf. Texas has artificial turf at 18 percent of its high school football stadiums. It also has an MRSA infection rate among players that is 16 times higher than the estimated national average, according to three studies by the Texas Department of State Health Services.

Scary, absolutely. What makes this even more troubling is that there doesn't seem to be an accepted practice by the medical profession to treat MRSA. Doctors have differing opinions as to what drugs to use as first-line treatments. One company that provides such a drug is ViroPharma (NASDAQ: VPHM), a small-cap bio firm with a market cap of around $600 million.

ViroPharma markets Vancocin® capsules as "the only antibiotic approved to treat two significant bacterial infections of the lower digestive tract. The product is indicated for oral administration for treatment of enterocolitis caused by Staphylococcus aureus (including methicillin-resistant strains)."

ViroPharma started marketing Vancocin in 2004 and sales of the antibiotic have grown 22% in the first nine months of this year. Stock has gotten pummeled off of disappointing results of clinical trials for a hepatitis C drug and heating up of competition surrounding Vancocin. That said, ViroPharma has an extremely strong balance sheet with about $300 million of net cash/investments and some nice cash flow.

Let's hope that the medical community finds a way to treat MRSA. Regardless, ViroPharma seems poised to continue going long in this market.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author doesn't own shares in VPHM.

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Last updated: July 06, 2009: 12:05 PM

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