CDC investigating new E.coli strain linked to Chipotle

[December 22, 2015]  (Reuters) - Federal authorities are investigating a new E.coli strain linked to Chipotle Mexican Grill Inc, piling more pressure on the popular burrito chain already grappling with an outbreak that has affected about 50 people in nine states.

The Centers for Disease Control and Prevention (CDC) said on Monday it is investigating five new cases of a "different, rare DNA fingerprint" of the Shiga toxin E.coli O26.

The federal agency said it is unclear whether the latest cases are related to the outbreak that started in October.

The company's shares, which touched a 17-month low in regular trading, were down 0.2 percent in extended trading.

Of the five new cases reported, one each are from Kansas and North Dakota and three from Oklahoma, the CDC said.

The illnesses started between Nov. 18 and Nov. 26, and all five patients reported eating at Chipotle outlets in the week before falling sick, the CDC said.

At least 80 students were sickened by norovirus after eating at a Boston area Chipotle outlet, the Boston Health Public Commission had said on Dec. 9.

"The bottomline is that I don't think it's anywhere near over... Chipotle needs to regain the trust of their customers and it's not going to come cheap," Maxim Group analyst Stephen Anderson said.

Chipotle has been under scrutiny since November, when health officials first linked it to an E. coli outbreak, the company's third food safety incident since August.

Chipotle later said its fourth-quarter comparable-restaurant sales could drop by 8-10 percent, compared to a year earlier, marking the first decline in the company's history.

"If there is a more serious outbreak with the second strain, I think it has a potential to hurt fourth-quarter earnings as well" Anderson said.

Founder and co-Chief Executive Steve Ells apologized to Chipotle's patrons earlier this month and promised strict food safety practices to prevent illnesses.

"We are in the process of implementing reassessed programs including high-resolution testing of ingredients," Chipotle said in an emailed statement on Monday.

The CDC said it was not including the five new cases to the count for the October outbreak.

The CDC also said that a new case of E.coli was reported in Pennsylvania, but noted that the person had not eaten at a Chipotle restaurant. (http://1.usa.gov/1XQTh8z)

Chipotle's shares closed down 3.5 percent at $522.01 on the New York Stock Exchange on Monday.

Up to Monday's close, the stock had lost nearly 19 percent since end October, when the first news of food poisoning was reported.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila and Andrew Hay)

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