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Investing in the Future of Vaccines
Vaccines have traditionally be less profitable than therapeutic products. In the past, the pharmaceutical industry has devoted far more money to research in treating disease than in preventing it. That may have made sense in the “old days” when the cost of healthcare was not of serious concern. In light of the worldwide recession and rising healthcare costs, investment in vaccine technologies is looking more attractive.
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 successful in commercializing its theories, its market value could be far above its current figure below one hundred million dollars.
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. If an influenza outbreak were to occur with little warning, speed would be a critical factor in producing new vaccines to combat deadly new flu strain mutations. 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.
The writer of this article does not own an equity position in either of the companies discussed. This article should be used for information purposes only and should not be construed as a recommendation to invest in any security.
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