I am sorry to hear that your cat has been diagnosed with sporotrichosis. This fungus can be a very difficult disease to treat and the prognosis even with treatment is guarded. You don't mention what form your cat has - is it affecting skin, skin and lymph nodes or your cat's entire body? Unfortunately, since I can't physically see your cat and the extent of the disease, I can't make a comment on if euthanasia would be warranted. You should discuss this further with your veterinarian to find out exactly why he or she has recommended this course.
There is treatment for this disease. Anti-fungal medications are given for a minimum of several months and even with that, treatment may go for as long as 6 months. The difficult thing is that often the disease will appear better and you may not see lesions but the organism can still be present.
Also a concern with this disease is the fact that it can be transmitted to you and to your other cat. The exudates can contain high numbers of Sporothrix organisms. It is ideal to use gloves when you handle your cat and be careful to cover any open wounds you may have. The only way to actively prevent your other cat from contracting this disease is to not allow your cats to have contact with each other. Two cats with sporotrichosis is the last thing you want.
You are correct that this disease is most often transmitted through a catfight (usually through a claw or bite wound). If your cat is going outside, he is putting other cats in the neighborhood at risk. He is also at a high risk for contracting the Feline Aids Virus and the feline leukemia virus. If he has not been tested for these lately, I would recommend it. If he did turn up positive on either, then the prognosis of the sporotrichosis is worse.
I'm sorry there are no easy answers for this. I would start by talking to your veterinarian further and let us know if you have more questions. Good luck.
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