Health and Healthcare
7 Companies in the Fight to Defeat the Zika Virus
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In 2016, it is the Zika virus that has the public worried about the next pandemic. Past scares have been around Ebola, E. coli, SARS, mad cow, swine flu and many others over the years. These are all real issues, and unfortunately these diseases and viruses have led to countless illnesses, as well as many deaths for human and animals alike.
The Zika virus is now actively targeted by the U.S. National Institutes of Health, the World Health Organization and other governmental agencies and non-governmental bodies. The rate of infection is growing and the damage to unborn babies is more traumatic than any parent would ever wish to deal with.
Now that the National Institutes of Health has over 500 travel-associated cases (as of May 18) and over 800 cases in U.S. territories, the heat is on for a vaccine or a cure. This represents huge opportunity for the businesses targeting Zika, and as of May 25 the amount that will be used to fund this research for a cure remains pending.
24/7 Wall St. has tracked Zika’s developments and the companies that are targeting the virus. Many companies are being passed around as Zika virus winners, but the reality is that many of them are so small or have sketchy histories. This is why we are featuring seven notable companies targeting the Zika virus. Not all of them are solely located in the United States, and this list excludes any of the would-be winners that are penny stocks or are listed on alternative exchanges.
Many traders and investors already have made their Zika investments and bets. With newer funding at hand, if it is finalized, investors might want to avoid the risks of some companies. There is no free lunch, and by now it should be obvious that the biotech and emerging medical area can be far riskier than other traditional sectors.
One more warning needs to be heeded here. Dr. Anthony Fauci, who oversees the National Institutes of Health’s efforts on allergy and infectious diseases, as well as emerging diseases such as Ebola and Zika, has warned that no virus cure exists now nor will in the immediate future. He has said:
We will not have a widely available safe and effective Zika vaccine this year and probably not even in the next few years.
A few years is forever for many investors and speculators. Consider yourself warned that there may be no easy path to profits here. Unfortunately, there is also the risk that no one may win in this fight against the Zika virus.
Gilead Sciences Inc. (NASDAQ: GILD) may be best known for treating HIV/AIDS and hepatitis C, but the world’s biotech giant also has patented compounds for inhibiting flavivirus infections and that is said to include the Zika virus infection. Gilead has found itself on the business end of a price targeting for the political campaign folly in 2016, and trading at $86.50, its market value is $115 billion. The stock has a 52-week trading range of $81.28 to $123.37.
Inovio Pharmaceuticals Inc. (NASDAQ: INO) is developing a synthetic vaccine called GLS-5700 for the Zika virus. As recently as May 16 came news that it made antibody and T-cell responses in monkeys, demonstrating the product’s potential to prevent infection from this harmful pathogen. Inovio synthetically generated DNA vaccine constructs targeting multiple Zika virus antigens using its SynCon vaccine technology. Inovio hopes to conduct its first human trial in 2016, and it is developing its Zika vaccine with GeneOne Life Sciences and academic collaborators with whom Inovio previously has collaborated with in vaccine studies for Ebola and MERS. Its shares trade at $11.20, with an $820 million market cap, and its 52-week range is $4.50 to $11.69.
Intrexon Corp. (NYSE: XON) owns Oxitec, a British maker of genetically modified insects. Its modified mosquitos have been said to help in being able to diminish wild populations of mosquitos that spread the Zika virus and dengue fever. This one is far from being without critics, and some of the stated concerns have been that changing the genetic makeup of mosquitos could harm or destroy certain ecosystems. Intrexon is valued at $3.6 billion, and its $30.50 share price compares to a 52-week range of $18.52 to $69.45.
NewLink Genetics Corp. (NASDAQ: NLNK) recently may have seen its shares tumble on a pancreatic cancer vaccine failure. It is involved in many viruses and diseases, but back in February NewLink announced that it has initiated a project to develop new treatment options for the Zika virus. That being said, this more than $300 million market cap company has many targets, and its $11.05 share price is within a 52-week range of $9.23 to $56.16.
Quest Diagnostics Inc. (NYSE: DGX) is more of a testing company, so its focus is on identification rather than on cures. That being said, in late April came the news that it received a Food & Drug Administration (FDA) Emergency Use Authorization (EUA) for the Zika Virus RNA Qualitative Real-Time RT-PCR test (Zika RT-PCR test). The company’s press release at that time said that this test was developed by the reference laboratory business of Quest’s Focus Diagnostics subsidiary. The proprietary molecular test is intended for the qualitative detection of RNA from the Zika virus in human serum specimens from certain individuals. The share price just reached a new 52-week high of $78.10, compared to the 52-week low of $59.66. Its market cap is $11 billion.
Sanofi (NYSE: SNY) is another well-heeled and established drug player already worth $105 billion. That makes it hard to find new winners that will move the needle. Sanofi already has a dengue vaccine, and in February it entered into a plan to develop a vaccine against the Zika virus via its Sanofi Pasteur vaccine division. The share price is $41.00, in a 52-week range of $37.63 to $54.98.
Spectrum Brands Holdings Inc. (NYSE: SPB) is a consumer products company rather than biotech or pharma, so it might not be the first target company that comes to mind in fighting a virus or disease. Yet, Spectrum Brands has household insecticides and insect and animal repellent products among its endless product list. Now trading at $117.50, this was at a mere $101.00 at the start of 2016, and it briefly traded under $90 during the sell-off earlier this year. It now is valued at 23 times expected 2016 earnings. Spectrum Brands even listed on its own careers site back in March:
We’re taking on the Zika virus with a new formula in 60 of our products. In connection with the CDC, we’ve donated over 55,000 units of Cutter Insect Repellent and Repel to areas and people most in need, including pregnant women in the USVI.
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