Uncle Sam has already delivered $162 million in funding to many of the biopharm companies listed in Luskin's index. And more
cash is on the way. But American biotech companies have some catching up to do, so the money will surely help.
Most of the heavy lifting on bird flu vaccines has been done by overseas companies, most notably Sanofi-Pasteur, a French
biotech firm. Early tests on the company's flagship H5N1 vaccine look very promising. Especially encouraging is the recent
news that Sanofi-Pasteur has added another ingredient to its flu vaccine that seems to heighten the impact of the vaccine
by allowing scientists to use less antigen in its doses. This seems to boost the potency of lower doses. The new ingredient,
called alum, allows an individual dose to be lowered from 90 micrograms of antigen to 30 micrograms of antigen. A follow-up
study on 300 participants showed that the enhanced vaccine could mean providing more doses to more people.
The antigen dilemma is a big issue to biopharm companies. Says Dr. Carlton Turner, president and CEO of Carrington Laboratories,
which is also in the bird flu vaccine hunt, "Policymakers from around the world are responding as best they can to the threat
of an H5N1 avian flu pandemic. The challenge lies in trying to find the right antigen, producing enough of it to protect the
world's population and then finding a way to deliver it to large populations efficiently."
FAILURE IS NOT AN OPTION
No matter what happens, the stocks of companies involved in bird flu research are in that rare environment, where even bad
news isn't enough to slow such stocks down.
Consider Luskin again. He notes that when Sanofi disclosed some disappointing results for one of its clinical trials with
avian flu vaccines, investors barely blinked. Even with the bad news Luskin's index was still up 1.3% for the day, primarily
because the disappointing results with Sanofi just meant that more money would have to be thrown at the problem. Call it the
classic "failure is not an option" strategy.
Still, if you're considering taking the plunge into bird flu-themed stocks, be careful. While scientists do believe there
is a good chance that avian flu will hit American shores later this summer (the virus is literally carried airborne by migrating
birds, whose flight patterns take them west in the warmer season), if the virus does not pan out, then you'll be left holding
That's what happened to the SARS panic in 2004. There was a San Diego company, Vical, Inc., which produced a speedy vaccine
for the SARS virus that intrigued traders and investors. But when the SARS virus fizzled, the company's stock price plummeted.
"There are so many unknowns and a lot of hype," said A.G. Edwards analyst Al Goldman in an interview with the Associated Press
in December 2005. "The avian flu potential is something that you can't get your arms around because no one knows if—or when—a
pandemic is going to happen."
The truth is, a pandemic is already brewing on Wall Street. When there's money to be made, it's always wise to watch the birdy.
Celebrity author and business/finance commentator for CNN and Fox News, Brian O'Connell has written for The Wall Street Journal and Newsweek, 79 Radcliffe Drive,Doylestown,PA 18901,267.880.3144, fax 267.880.1939, firstname.lastname@example.org