Why Invest in Tuberculosis?

“There are 41,810 cases of active TB in South African mines every year,” Health Minister Aaron Motsoaledi told the Parliament recently. “It is 8 percent of the national total, and 1 percent of the population, very unfortunately. It is the highest incidence of TB in any working population in the world. It affects 500,000 mineworkers, their 230,000 partners and 700,000 children.”

According to Voice of America News, the Treatment Action Campaign in South Africa is calling on the government to declare the tuberculosis epidemic a public health emergency. The country has the highest TB infection rate on the planet overall, largely because of the high prevalence of HIV in the nation. People who have HIV are more vulnerable to tuberculosis due to their weakened immune systems.

“HIV is a disease that had a significant footprint in the U.S. and Europe,” Marcus Low, the Treatment Action Campaign’s head of policy, said. “So there was a lot of drug development. But TB is really a disease of poor countries. So we don’t have the same investment in research and development. We’re really facing a pretty serious crisis in South Africa. We have in the region of 450,000 new infections every year. And it’s the number one cause of natural death in South Africa.”

The South African government is taking steps to reduce the impact of tuberculosis in the country, including introducing new technology that reduces the diagnostic process to two hours so people can access appropriate care quickly. The government has also sent outreach teams to mining areas to address primary care needs. The scourge of multi-drug resistant tuberculosis is much more difficult to address, however. Infected people spend an average of 18 months in care at dedicated facilities for the treatment of this type of tuberculosis before they recover, according to Mining Weekly.

The highcost of tuberculosis to mining

The epidemic directly impacts mining companies in the country, many of which are already dealing with other challenges like strikes and other forms of unrest. Investors should be aware that 9 of every 10 gold miners in southern Africa are infected with tuberculosis – and one person with active TB can spread the disease to 10 to 15 people a year, according to Aeras. Tuberculosis has a massive cost for the mining industry in southern Africa. Wages lost due to the disease in the mining sector total $320 million, while the treatment costs to the industry come in at $253 million. The mining industry also faces an annual $568 million cost in lost productivity and training costs as a direct result of the epidemic.

This data points to the necessity of research and development activities for a tuberculosis vaccine, which Aeras advocates. Investors who are committed to the South African resource industry in particular may wish to investigate opportunities to invest in tuberculosis vaccines for the purpose of mitigating the serious costs to mining companies in that country that result from the disease.

Companies involved in creating preventions and treatment for tuberculosis may be smart investment options. Here are firms that are options for this investment strategy:

GlaxoSmithKline (NYSE:GSK)

GlaxoSmithKline, a global pharmaceutical firm, is working on several diseases the company considers neglected. It established a research center at Tres Cantos in Madrid to work toward treatment for malaria and tuberculosis. There is also activity underway in Belgium that concerns prevention through vaccines rather than treatment. According to its website, GlaxoSmithKline bases the decisions of these research units on public health and socio-economic factors rather than projected commercial returns. The research center in Spain works with the Global Alliance for TB Drug Development. More than 100 researchers work in the Tres Cantos facility addressing these issues.

Vertex (NASDAQ:VRTX)

Vertex, a biotechnology company founded in 1989, is researching prevention of and treatment for several infectious diseases, including tuberculosis. The company’s first medication to meet with U.S. Food and Drug Administration approval was a treatment for hepatitis C, followed by one for cystic fibrosis. Currently, among its many projects is a collaboration with several research organizations and 60 scientists around the world on treatments for tuberculosis. This partnership began in 2008 and includes scientists from Harvard, Stanford, the Veteran’s Administration Medical Center and the Chinese Academy of Medical Sciences, among others.