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Companies that stand to benefit from the swine flu outbreak

by Artisttia Yarns

Created on: May 01, 2009   Last Updated: July 13, 2009

The Swine Flu pandemic continues to exert its effect on the market. There has been a worldwide downturn in shares of airline and hotel stock due to travel being curtailed. Conversely, companies are benefiting from the outbreak.

Those businesses that are showing the most profits, during the pandemic, are the ones which either fight infection or supplying personal protective equipment (PPE), such as Kimberly-Clark (KMB) or 3M (MMM). Of the two choices, Kimberly-Clark would be the better investment. They currently maintain a website dealing specifically with the pandemic.

Speculation on increase drug sales, have positively impacted the pharmaceutical industry, as demonstrated by S&P (Standard and Poor's 500 Index). Companies currently manufacturing drugs to combat the disease or are likely to discover a new vaccines have ticked upwards as demonstrated by AstraZenica (AZN) and Roche(ADR).

Roche's, maker of the medication whose brand name Tamiflu (oseltamivir), stocks have risen. Tamiflu is proven to be one of two effective weapons in combating H1N1. Rises have been seen in shares of Chugai Pharmaceutical Co., the Tokyo-based unit of Roche, in the Asian market.

GlaxcoSmithKline (GSK) is the maker of the other drug, Relenza (zanamivir), showing itself effective against the new flu. GlaxcoSmithKline has already sent over 100,000 packs of Relenza to medical authorities in Mexico, and they are in the process of development of a vaccine against the disease. They have also supplied 170,000 doses of seasonal flu vaccine to that government as well. Expect demand for products of GlaxacoSmithKline to continue to increase.

Other companies currently either in or close to production of an effective vaccine are Baxter (BAX), Novavax (NVAX), Novartis AG (NVS), Solvay (SOLB). In early July 2009, Vical Inc (VICL) stock rose by 20 percent after the announcement that their vaccine against Swine Flu showed promise.

Other pharmaceutical companies to watch would include Gilead Science (GILD) and is a BioCryst Pharmaceuticals (BCRX). As Gilead, already manufactures antiviral drugs, these stocks may increase. A riskier investment is BioCryst Pharmaceuticals. They are already in the later trials for the clinical drug, Peramivir, for treating the flu. Peramivir may prove invaluable in the near future.

Stocks are rising in companies such as Inverness Medical Innovations (IMA), Quidel (QDEL), Genzyme (GENZ), Meridian Bioscience (VIVO) and 3M (MMM) are makers of influenza detection kits. These companies should be on your must watch list, as they continue to advance.

The company Johnson & Johnson (JNJ) is the maker of Purell, an alcohol based hand sanitizer. Alcohol based hand sanitzers will assist in quelling the spread of disease. As such, expect continued rises in this company's stock as well as other companies that make alcohol based hand sanitzers.

CVS (CVS) and Walgreens (WAG) surely will experience an increase as people purchase antidiarrheal agents, antiviral tissues, and medications during the course of the outbreak of H1N1.

Businesses that provided entertainment diversions at home like Netflix (NFLX), which can deliver DVD, rentals in the mail are a good hunch. Stores such as eBay (EBAY) or Amazon.com (AMZN) can bring the amusement of shopping home may be another solid choice.

If stocks continue to follow their current pattern, as they have from the onset of the Swine Flu alert, Kimberly Clark and GlaxacoSmithKline are your best bets.

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