Sunday, April 26, 2009

Swine Flu and Firms That Operate in This Space

While to some it might seem inappropriate to make investment decisions related to the swine flu outbreak, the reality is that events like this change the economic fortunes of many firms (for better and worse). In the AIM Program we follow global geo-economic events to understand their implications on economies, industrial sectors, and individual companies. A potential outbreak of swine flu could have significant ramifications on many economic participants. The following contains a short listing of firms that operate in the space impacted by a possible swine flu outbreak.

Some reports/rumors are indicating that this strain of swine flu has some H5N1 bird flu mixed in with it. That is why BCRX (see previous posting) was up 26% Friday on 7
times the average volume. BCRX is the maker of "Peramavir" (a cutting edge avian flu vaccine). Note: the stock was up another 12.5% in after hours trading on Friday.

If it turns out that there is no bird flu associated with the current swine flu outbreak, then SVA‎ - Sinovac Biotech Ltd. - traded on the AMEX - a Chinese flu vaccine maker is another firm to consider. It was up 16% Friday on 1.4 times average volume.

Viral vaccine maker Novavax (NVAX) rose more than 75 percent on Friday to $1.42 per share (see previous posting). Note that these small firms are young, unproven, and highly speculative equity investments. Further due diligence is required before making any investment.

Other potential stocks likley to see action related to the potential swine flu outbreak are:
Roche Holding Ltd. (ADR)(RHHBY). They acquired DNA the maker of "Tamiflu"
GlaxoSmithKline plc (ADR)(GSK). Maker of "Relenza"
3M Company(MMM). A major manufacturer of N95 face masks
Crucell N.V. (ADR)(CRXL). A Dutch firm with advanced vacine manufacturing technology
Teva Pharmaceutical Industries Ltd (ADR)(TEVA). A generic drug maker
Gilead Sciences, Inc.(GILD). A major bio-pharma research firm
Quidel Corporation(QDEL). A US vaccine applicator manufacturer
Johnson & Johnson(JNJ). A major manufacturers of anti-bacterials and other products

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