Investing in the Future of Vaccines
Vaccines have traditionally be less profitable than therapeutic products. For many years the pharmaceutical industry poured far more research money into treating disease than in preventing it. When the cost of healthcare was less of an issue, focusing on treatment rather than prevention might have made some sense. However, in the modern era of worldwide recession and rising health costs, the investment and profit picture for vaccines looks better all the time.
What are the companies best poised to benefit from this new and possibly permanent shift in thinking about healthcare costs and the value of preventative medicine? Obviously, the big vaccine companies will do well, but the impact on share price may be slow and perhaps moderate. For investors with a more speculative interest, there are two small vaccine technology companies poised for dramatic success.
First, consider Novavax, Inc (Nasdaq: NVAX). This company is creating new vaccines on the basis of “virus-like particle (VLP)” technology. VLP technology involves making an artificial virus structure without the functional portion of the virus. When a VLP vaccine is injected into your arm, your immune system thinks it is being invaded by the real virus and produces a defensive reaction. The theory is that VLP vaccines will be more potent than simpler types of vaccine formulations. If NVAX is right about its theories, the company will eventually be worth far more than its current sub-hundred million dollar market value.
Secondly, take a look at iBioPharma Inc (OTCBB:IBPM). This company is planning to use green plants to manufacture innovative vaccines for serious infectious diseases including anthrax, plague, and pandemic swine flu. IPBM’s green plant vaccine production technology not only reduces the cost of complex vaccine products, but also speeds up their production. Speed may be important when flu strain mutations produce deadly new types of influenza, or if an outbreak were to occur with little or no warning. This company has a total market value well below ten million dollars, a number that is sure to rise as its products and technology become better known.
This article’s author does not own stock in either of the companies discussed herein. This article should be used for information purposes only and should not be construed as a recommendation to invest in any security.
