Monday, July 27, 2009

H1N1 is Big Business: Stock Market Opportunities

The H1N1 virus has very serious human consequences which are more important than any economics or profits.

From a strictly stock market point of view, the virus will have significant effects on the profits of many companies, both positive and negative. We reported on Friday June 12 that Novartis had developed ithe first successful vaccine, Novartis. The Ottawa Citizen reports today that makers of vaccines and anti-viral medications are already seeing exponential rises in sales. Glaxo-SmithKline reported better than expected quarterly profits mainly due to sales of the anti-viral Relenza, which jumped 2,000% compared to the previous year.

Gilead Sciences also said that Q2 royalties and revenues increased 29%, mainly due to sales of Tamiflu by Roche. Roche said its sales rose 200%. Analysts say this is just the beginning. At least 50 countries have placed orders or are negotiating purchases. Baxter said it has taken orders from 5 contries for 80,000,000 doses.

Because of the spread of H1N1 has been so rapid, new technologies are being developed, including for example, adjuvants, made by Novartis and Glaxo. Protein Sciences Corp, and Novavax are using insect cells, a faster method than conventional chicken egg technology.

Farmacies such as Walgreen, CVS stores, Shoppers Drugmart, will see increased sales of reliever medicines, masks, and of course also checkout merchansdise.

Negative Effects on Profits.

A rapid spread - and fear - of H1N1 will have many effects on the overall health system. People will stay away from hospitals and will postpone elective surgeries such as hip replacements or cataracts, or even routing exams such as colonocopies. During SARS in 207, elective surgeries were redcued by 22%.

Hospital supply distributors will be afected (Henry Schein, PSS World Medical)

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