Two biotech stocks to buy in the arms race against bugs

With antibiotic resistance costing the US healthcare system $20bn a year, there's profit in battling bugs. Matthew Partridge looks at the problem and picks two biotech stocks to buy.

Antibiotics are a miracle of the modern era. Without them, we would be plunged back into a world (and a world within living memory, at that) where a small cut could turn into a death sentence and surgical procedures that we now consider routine would be highly risky. The huge public availability of the drugs after 1945 helped to treat once-deadly diseases like tuberculosis. By enabling hospitals to quickly treat infections, they also increased survival rates even from complicated surgery. More controversially, they are also used in food production to reduce the spread of disease among animals in the cramped conditions on modern farms and to boost crop yields.

But there's a problem. Very occasionally the bacteria that causes an infection mutates in such a way that makes it resistant to the antibiotic. This is particularly likely if a course is not completed (that's why the doctor tells you to take the whole bottle, even if you feel better) or if they are used when they are not needed. This resistance issue has always been a problem, but the routine use of antibiotics even for ailments they can't help with has greatly increased the problem, while their use in agriculture has made things worse by continually exposing people to low doses.

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Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri