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Biotechs Gain on Flu Vaccine Hopes

Published: Monday, 5 Oct 2009 | 12:06 PM ET

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By: Yolaiki Gonzalez, Ariel Nelson

The CDC announced today that healthcare workers in Tennessee and Indiana would be amongst the first to get swine flu vaccinations. The outbreak of the H1N1 swine flu virus has sadly killed over 3,900 people per a report by the World Health Organization (WHO) on September 25th. At the same time the race to battle the pandemic has propped up the shares of biotech companies that promise solutions.

>> US Swine Flu Vaccination Efforts Start Today

Mass vaccination programs are expected to be developed in every U.S. state. Also nine countries that include Australia, Brazil, Britain, France, Italy, New Zealand, Norway, Switzerland, and the U.S. will lead the way to ensure that less developed nations are not left behind and have their own stockpiles. With the coming colder months and the flu season, government officials are scheduled to distribute H1N1 vaccines more widely, potentially leading to larger profits in the pharmaceutical sector.

Companies such as the Parisian Sanofi-Aventis [SNY Loading... () ] has contracted about 75.3 million doses of H1N1 vaccine to the U.S government and other big pharmaceutical names such as AstraZena [AZN Loading... () ], GlaxoSmithKline [GSK Loading... () ], and Novartis [NVS Loading... () ] will also supply the government with a total of 250 million more doses by the end of the year. In part because the H1N1 virus is unlike the swine flu of the 70’s or the Avian flu, many small biotech pharmaceuticals like Inovio Biomedical [INO Loading... () ], Vical [VICL Loading... () ] and BioCryst Pharmaceuticals [BCRX Loading... () ] have also jumped to create antiviral drugs to prevent the spread of additional H1N1 outbreaks. For example, Vical has added Vaxfectin developed to treat H5N1 Avian flu and H1N1 to its drug portfolio, while BioCryst has been awarded about $180 million by the U.S. Department of Health and Human Services for its late stage development of Peramivir, a flu drug developed to treat H1N1-like influenza.

The surge in demand has led to big gains in the past 5 months. Stocks of companies such as the San Diego developer of antiviral vaccines, Inovio Biomedical [INO Loading... () ] and Hemispherx BioPharma [HEB Loading... () ] have rallied the most as each has gained over 350% and 250% since the spread of the swine flu H1N1 back in April.

Will these pharmaceutical stocks survive the hype once preventative H1N1 shots become readily available to the public in October or will the rally flop? A controversy surrounds the issue because some states such as New York are expecting to make the H1N1 vaccine mandatory for the health services industry as per a USA Today Report (see story here). However, governmental agencies in Canada may be even suspending seasonal flu shots in several of its provinces such as British Columbia, Quebec, Ontario, Alberta, and Nova Scotia due to a Canadian study that suggests that people vaccinated against the seasonal flu may run twice the risk of contracting the swine flu-H1N1, per a report publish by The Vancouver Sun.

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