Investing in the Companies That Create New Flu Vaccines

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Influenza 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 Unfortunately, most of the technology for producing flu vaccines is outdated, based on growing flu viruses in chicken eggs. The old technology has two glaring drawbacks: it is slow, and it will not work if a strain of influenza develops that kills birds and their eggs, since eggs are used as the growth medium to develop the vaccines.

Fortunately, several small companies are working on new approaches for producing influenza vaccines faster, cheaper, and better. Can investors benefit from this innovation? The answer is yes, with patience. Conservative investments in the long established big drug companies such as Sanofi-Aventis or GlaxoSmithKline may be safer, but investors have the potential to make much higher returns in some of the smaller companies.

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

A different approach is in development by iBioPharma Inc in Newark, Delaware. This company has formed an alliance with the international nonprofit research organization, Fraunhofer U.S.A. Center for Molecular Biotechnology, and is developing flu vaccines produced in green plants. The technology is supported by grants from the Bill & Melinda Gates Foundations as well as from government contracts. As with insect cells, plant cells should not be adversely affected by viruses that are harmful to eggs, and there are additional advantages in speed and cost with plant based technologies.

Biotech investments can be risky, but these companies offer a little better safety than some, since their technologies are known in advance as being likely to work, so the risk of unproven therapeutic performance found in other biotech efforts is eliminated. The upside for early investors in these companies could be substantial if they obtain FDA approval for their innovative manufacturing methods.

Disclaimer: the writer does not currently own any position in the stocks discussed in this article. This article is for educational purposes only and should not be viewed as a recommendation to make any specific investment.