Wednesday, April 14, 2010

Buy Stock In Flu Vaccines

Flu is a dangerous disease, and unfortunately none of the drugs that treat it work very well. The only effective way to prevent influenza is luck and vaccination. Unfortunately, most of the technology for producing flu vaccines obsolete, based on growing flu virus in hens' eggs. The old technology has two obvious disadvantages: it is slow, and it will not work if a strain of flu develops that kills birds and their eggs, since eggs are used as substrate to develop vaccines. 

Fortunately, there are several small companies working on new ways to produce flu vaccines faster, cheaper and better. Will investors can take advantage of this innovation? The answer is yes, with patience. Conservative investment in well established large pharmaceutical companies like Sanofi-Aventis and GlaxoSmithKline may be safer, but investors have the potential to make a much bigger return in some of the smaller companies. 

Novavax, Inc. is a Maryland-based company using a new insect cell technology for the development of vaccines for both influenza and measles. Initial safety data from human trials are encouraging, although this company's products are still in the early stages of testing. If a flu virus arrives which can damage the eggs, it is likely that insect cells will still be resistant to it. 

Another approach is the development of iBioPharma Inc, in Newark, Delaware. iBiopharma is allied with the international nonprofit organization Fraunhofer USA Center for Molecular Biotechnology, and is developing vaccines against influenza produced in green plants. The technology is supported by grants from the Bill & Melinda Gates Foundation and from government contracts. As with insect cells, plant cells are not adversely affected by viruses that are harmful to the eggs and there are additional advantages in speed and price with plant-based technologies. 

Although investing in biotechnology is often a risky proposition, one advantage of these companies is that their products are very likely to work, so the risk of unsubstantiated therapeutic performance or safety is much lower than other types of biotechnology investments. Upside for early investors in these companies could be substantial if they get the FDA approval for their innovative manufacturing methods. 

The author of this article does not own stock in any of those companies. This article is intended to be used for informational purposes only and is not a recommendation to buy or sell a particular security.

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