Swine Flu And Its Consequences

The World Health Organization (WHO) will hold an emergency meeting today (Saturday, April 25, 2009) to discuss a deadly swine flu strain outbreak in Mexico and the United States. The WHO’s director-general, Margaret Chan, said the outbreak of the never-before-seen virus is a very serious situation and has “pandemic potential.” But she said it is still too early to tell if it would become a worldwide outbreak. The pandemic alert level is currently set at 3.


The first, and by far worst, consequence is that the outbreak killed 68 in Mexico and infected over a 1,000 people in Mexico and 8 in the United States.

A second consequence is that the stock price of many pandemic and bio defense companies shot up yesterday. BioCryst Pharmaceuticals (BCRX), Inhibitex (INHX) and Novavax (NVAX), three biotech companies doing research to combat infectious diseases jumped 26, 25 and 75 percent, respectively.

Shares of Swiss drugmaker Roche Holding AG closed up 3.48% on Friday after the WHO said the new virus appears to be susceptible to Roche’s flu drug Tamiflu. Roche said it has five million treatment courses of Tamiflu on stand-by for the WHO in its “Rapid Response Stockpile.”

And of course, when we think about Tamiflu, we also think about Hemispherx Biopharma’s (HEB) Ampligen. Investigators from Japan’s Institute of Infectious Disease have conducted studies in animals that suggest that Ampligen can stimulate a sufficiently broad immune response to provide cross-protection against a range of virus strains, including the avian influenza virus (H5N1). Hemispherx closed at $0.58, up 20 percent.

Not only biotech stocks profit from this outbreak, also Alpha Pro Tech (APT), a manufacturer of disposable protective apparel and infection control products, like protective masks, rose almost 11%. These protective masks are being distributed widely in Mexico to prevent infection.

I hope, from the bottom of my heart, that in the course of next we see the stock prices of the above mentioned companies go down again, as that would mean the outbreak is under control. We mustn’t forget, if this really starts to spread, there’s no way in telling where and when it will stop.

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