Four Ways to Play the “Cure” for the Flu

9 | By Michael A. Robinson

We’ve all seen the headlines.

The flu has made its annual visit to the U.S., reacquainting itself with your kids, spouse, parents, friends and co-workers. But this strain has been especially nasty, resulting in shortages of the very vaccines that might have moderated its effects.

One of my colleagues here – an editor with a young son – finally got his just last week – only because he stubbornly went to the same Rite-Aid every single morning for an entire week.

I’m sure you have similar stories you could share.

When you think about it, this year’s flu season illustrates one of the great ironies of our time. Although advances in medical technology have enabled us to create the vaccines that so far have kept the yearly viral visit in check, the reality is that those advances have been leapfrogged by global travel, an advancement that makes a pandemic more likely than ever before.

Fortunately, there is an answer – an innovation worthy of the Strategic Tech Investor, and one that savvy investors can play for windfall profits. I’m going to show you four ways to grab those profits for yourself.

But first we need to really understand the challenge at hand.

Let me show you what I mean.

At the start of each flu season, I literally count the days until I see the first mention of the Spanish Flu pandemic of 1918. I understand the attention it gets: Not only was it the worst flu outbreak in modern times, it is thought to have killed between 20 million and 50 million people.

By that standard, the SARS crisis of 2003 was a drop in the bucket. It killed less than 1,000 people around the world. But it cost a small fortune. The World Bank estimates the total hit to the global economy at some $33 billion.

No wonder health officials urge us to get flu shots…

Then came the vaccines – which, as it turns out, are actually like a page from history. The technology is decades old. Many vaccines stem from portions of viruses grown in chicken eggs – not exactly cutting-edge tech.

But the new generation of flu vaccines I’m going to show you right now will change that. They are cutting-edge tech. And they will help checkmate the advantages that global travel had granted to the flu virus – restoring balance in the process.

These new vaccines are synthetic, meaning they stem from fragments of man-made DNA. In essence, they are “programmed” to fight the flu or other designated diseases.

I see this as “disruptive technology” that will turn the $30 billion vaccine market inside out. Besides the flu, firms in this space are working on synthetic vaccines for leukemia, HIV, malaria, hepatitis and cancer.

Currently, no firm has a synthetic product on the market for human use. But trust me, they’re coming… and you’ll want to be a player when they do.

In the meantime, let’s handicap the leaders that I see out in the marketplace …

Synthetic Vaccine Play No.1: Inovio Pharmaceuticals Inc. (NYSE: INO)

Just a few weeks ago, I had dinner with CEO and co-founder J. Joseph Kim. He’s an award-winning scientist and former vaccine exec at Merck & Co. Inc. (NYSE: MRK). And he studied under one of the towering giants of biotech, Robert Langer, a distinguished professor at MIT.

More to the point, Inovio has great science. That’s why the firm has received millions in backing for its anti-malaria vaccine from a group affiliated with Bill and Melinda Gates.

Inovio also is working on a synthetic “universal” flu vaccine. And its other projects include, but aren’t limited to, vaccines for leukemia and cervical cancer. And Kim has another hook in the market. It’s a novel process of giving injections known as electroporation.

Here’s how it works. When the patient gets a shot, the injection also delivers a short electric pulse that causes the cell’s membranes to open and accept the DNA. Those cells then produce antigens that tell the immune system to fight the targeted disease.

With a market cap of a mere $100 million, the stock trades at roughly 70 cents a share. Inovio has no sales at present, but has done a great job raising money from the government and foundations to fund its operations. It is engaged in several clinical trials.

Synthetic Vaccine Play No. 2: Vical Inc. (NasdaqGS: VICL)

This small-cap biotech firm already has two products approved for sale, both for animals.

In the U.S, it has a green light to sell a vaccine that combats skin cancer in dogs. Canada has approved the sale of a vaccine Vical developed to fight a virus that is virulent enough to wipe out wide swaths of salmon, a critical part of that nation’s food chain.

For humans, Vical says it will soon complete a Phase 3 clinical trial of Allovectin, a therapy designed to treat the late stages of skin cancer that has spread to other parts of the body. The company is also in the early stages of clinical trial for a flu vaccine.

Like Inovio, Vical also has a CEO who formerly worked as a senior vaccine exec at Merck. Founded in 1987, Vical was a spinoff from the University of California-San Diego that was originally formed to fight AIDS.

With a market cap of $302 million, the stock of this clinical-stage firm trades at about $3.50. Though it’s losing money, it has roughly $80 million cash on hand and no debt.

Synthetic Vaccine Play No. 3: Novartis AG (NYSE ADR: NVS)

Though better known as a Big Pharma concern, Novartis entered the synthetic vaccine field back in 2010. That’s when it joined forces with Synthetic Genomics Vaccines, an offshoot of Craig Venter’s pioneering work in sequencing the human genome.

Under a three-year deal, Novartis is creating synthetic seed viruses to combat flu epidemics. From the seeds, the team hopes to have the ability to create big batches of synthetic vaccines in less time.

Backed by the Department of Homeland Security, Novartis has opened a $1 billion production plant. In late 2011, the company said it had begun making a stockpile of vaccines at the federal government’s request. The stockpile could be used without the FDA’s usual approval process in the event of a surprise outbreak of a deadly flu strain.

With a market cap of $158 billion, NVS trades at roughly $65 a share and a forward P/E of 12. It pays a dividend of 3.8%.

Synthetic Vaccine Play No. 4 Sanofi (NYSE: SNY

For its part, Sanofi struck a licensing deal last July with the University of Pittsburgh. Sanofi and the school hope to create a vaccine that protects against all strains of the flu and that also ends the need for annual shots.

“Our vaccine is adaptable to any delivery method, whether it is a needle to the arm or a nasal spray,” says Ted M. Ross, a vaccine scientist at the university. “It would protect against whatever strain of seasonal flu happens to be circulating, and it can be produced in as little as four months.”

Recently trading at around $47.60, Sanofi has a market cap of $125 billion. It has a forward P/E of 6.7 with an annual dividend of 3.7%.

With so many efforts ongoing at once, synthetic vaccines will soon become an important and useful tool in the global battle against disease. And when something benefits humanity on such a broad scale, it can’t help but enrich investors at the same time.

And that’s the formula we look for here at Strategic Tech Investor.


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9 Responses to Four Ways to Play the “Cure” for the Flu

  1. Robert L says:


    It seems to me that vaccine science, especially flu vaccine, is pretty close to rubbish. The Cochran Collaboration just published data that confirmed my suspicions on this. The fact that pretty much every doctor on the CDC Vaccine Advisory Committee has to sign a conflict of interest waiver is evidence that we don’t get the straight facts on these vaccines. If the federal government and others weren’t giving these vaccine manufactures contracts there would not be very much demand for their products. These vaccine manufacturers also use their clout to promote coerced vaccination programs for healthcare workers like myself and we certainly don’t appreciate it and we’re not pining for the vaccines. Pharmacies and doctors offices would not have to run such large advertising campaigns for these vaccines if everyone was actually demanding them. It’s a manufactured need and a manufactured market. Thanks, but no thanks, and my conscience would not allow me to profit from such shenanigans. I will look forward to your next recommendation.

    • George says:

      These deceptful practices are inevitable from the size of these guys. Like every business, once they get big they get the uncurable corporate insanity bug. Basic 101 management tells us that past a 4rth line of managerial oversight, information is lost at 80% so imagine what we get when you have governments with 20th lines and businesses with 10th lines of management. That is informational anarchy. If they dont get the information how can they possibly lead or produce good products and services?

  2. Ken says:

    What scares me about vaccines is that, according to what I read, they all contain mercury. Why do they have to put toxic chemicals into things that are supposed to keep you healthy? Why aren’t the people who concoct these things able to find a better substitute. Or are they trying to make us all prematurely senile? I avoid all that stuff like the plague. I also raise most of my own food without toxic chemicals, because I studied entomology, and the insect nervous system is so much like ours. All of the pesticides are nerve poisons and would have the same effect on us. The main difference is that we are a lot bigger. But the stuff is still retained in the fat and reproductive tissue. Could that be why we are having so much problem with birth defects and reproductive problems?
    The mercury concentrates in the brain. Could that be the reason why we are seeing so many stupid people?

  3. Mark reynolds says:

    What about a company called nanoviricides ticker Nnvc. They claim that their flu vaccine is 10 times more effective than the current tamiflu cure. Can you cast your always is over this stock. They also claim that there animal models show cures for pneumonia. Organ inflammation is another area of recent, success for this company.

  4. Frederick Oddi MD says:

    My biggest problem with influenza vaccine is in any given year we are given a influenza vaccine that does not contain the virus of the current epidemic.Until the discovery of current viral epidemic strain and production time of vaccine are decreased,we will always have problems.I was given influenza vaccine this year and got the flu and was sick for three weeks..Only big Pharmacy prospered..

  5. William Yoshida says:

    With all the toxin they put into the flu shot, the shot is dangerous to me. I understand that aluminum it appliaed to the flu shot to increase its longevity. The body has no way to get rid of aluminun and stores it in the brain.

  6. Mario says:

    Get your colloidal silver from health and nutrition store, or make your own (Google “how to make colloidal silver”), and no virus will be able to get you anymore. Show to those MF from big pharma the finger!…

  7. CJ says:

    Anything new inthe offing for shingles (Herpes Zoster) ? The current shot is pricy with side effects and sjort of effective in a significant jpercentage of cases. I have a patient who has had the vaccine and still has Zoster episodes.

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