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Post# of 252493
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DewDiligence

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Re: Biowatch post# 7012

Sunday, 02/27/2005 8:35:47 AM

Sunday, February 27, 2005 8:35:47 AM

Post# of 252493
Update on bird flu

[I tend to avoid investment plays connected with such “hot money” issues as bird flu, SARS, and the like. The affected stocks can go down pretty fast when the reality sinks in that generating positive cash flow from these crises is easier said than done.

One of my favorite scam stocks, HEB, is also pursuing a bird-flu treatment, although it is not mentioned in this write-up. I don’t think HEB has ever missed out on one of these hot ideas.]

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&gui...

>>
Bird flu fears raise small firms' profile
Corporations brace for action to fight deadly influenza

By Russ Britt
Feb. 27, 2005

LOS ANGELES (MarketWatch) - Increasing concern over the prospect of a bird flu pandemic is raising the profile of companies both large and small, any one of which could end up being a critical link in warding off the disease.

From pharmaceutical leviathan Chiron Corp. (CHIR: news, chart, profile) to tiny Amarillo Biosciences (AMAR: news, chart, profile) , a number of companies are jumping into the fray on how to attack what is known as avian influenza -- or H5N1 in scientific circles -- should an outbreak hit.

It's not just biopharmaceutical companies that are examining the issue either. The poultry industry is weighing in as part of an effort to reassure the public that chickens are safe to eat.

The virus is transmitted via birds such as chickens. But scientists say it's likely the virus will mutate, cross the "species barrier" and become transmittable from human to human. What's most troubling is humans have little or no immunity to the disease and have a high fatality rate. Public health experts believe the world is overdue for a pandemic, since the last occurred in 1968, according to the U.S. National Institutes of Health.

Should an outbreak strike quickly, it may be some time before officials would be ready to counterattack with a disease-blocking vaccine or even a treatment to cope with a deadly virus.

"I think it's a do-able project, but you can't do it in two months," said Carlton Turner, chief executive of Carrington Laboratories (CARN: news, chart, profile) in Irving, Texas. Carrington is working with other companies to develop a powder vaccine that could be inhaled much like nasal spray.

Yet Carrington and others have gotten a bump in shares in recent weeks. Trading in the low $6 range at midmonth, Carrington was up about $1 at one point last week, a 17 percent surge, as word of possible spreading of bird flu was passed around.

Perhaps the most notable project that exists to date is the National Institutes of Health's deal with Chiron and the Aventis Pasteur division of Sanofi Aventis (SNY: news, chart, profile) .

The contracts, awarded in May, provide for testing an investigational vaccine to be used on humans. But Sanofi's drugs are only now ready for trial, the company has said. Sanofi shares have jumped in the last week as mounting concerns have coincided with its statements that the drug is ready.

Sanofi shares started moving higher Feb. 18, and stood at $39.77 on Friday, up 6 percent. Chiron climbed throughout the week but remained below midmonth levels. Chiron shares ended Friday at $35.01.

Recent small outbreaks of bird flu in Vietnam and Thailand have prompted health officials throughout the world to sit up and take notice.

"It is going to occur. The question is when," said Dr. Gregory Poland, director of the Mayo Clinic's vaccine research group.

Pandemics can be as catastrophic. The Spanish Flu of 1918 killed as many as 40 million people worldwide. The disease took more than 500,000 American lives, many of them healthy adults.

This H5N1 strain of bird flu has had limited effects thus far. In 1997, avian influenza infected 18 people in Hong Kong and resulted in six deaths. In late 2003 and early 2004, an outbreak hit Southeast Asia but didn't spread easily from person to person. Thus far, 46 deaths have occurred from bird flu.

Poultry exports from the region have been cut off as officials there experiment with drugs that could be used to inoculate chickens.

U.S. poultry companies say the handling of chickens overseas is different than it is here.

"For example, chickens raised for our North American processing operations are housed in modern, enclosed facilities, which prevent contact with wild birds and other potential carriers of disease," said Gary Mickelson, spokesman for Tyson Foods (TSN: news, chart, profile) .

Mickelson said the company constantly monitors its flocks for the presence of disease.

The National Chicken Council echoed Mickelson's statements, but indicated that consuming an infected chicken might not even cause harm.

"Since cooking kills microorganisms including viruses, there is no danger of catching avian influenza by eating cooked chicken or other poultry," the council said in a joint statement with the National Turkey Federation last week.

As poultry companies try to keep the lid on the potential problem, a number of small biotech firms are expected to see an opportunity. AVI Biopharma (AVII: news, chart, profile) , won't say that it is developing a bird flu vaccine, but it is comfortable with the medical community thinking that it is.

"We've not put out anything public on that, but it's right up our alley," said Michael Hubbard, the company's investor relations director. "It would be a logical assumption that we would look at anything that's in our theater."

Based in Portland, Ore., AVI Biopharma's thinly traded shares ticked upward last week as bird flu concerns spread. It closed Friday at $2.49.

Amarillo Biosciences got a similar boost. That company's stock closed at 40 cents on Friday. It had traded under 30 cents the week before.

Amarillo founder Joe Cummins has yet to develop a vaccine, but is trying to convince health officials that small doses of interferon could be used to block influenza.

Some Asian nations in the 1970s and 1980s used interferon -- which essentially interferes with harmful substances in the body -- to make the effects of influenza less severe, Cummins said. Later, it was used in much higher quantities in the U.S. that were too large and thus rendered toxic.

The company has been testing low doses of interferon in animals and people to test the effects. Cummins contends the substance can be produced cheaply enough so that poorer Asian nations can use it, and quickly, so that it can be summoned to aid in a crisis.

"What are we going to do with the military if it starts hitting our troops in Iraq?" he said. "We have the data. We're just trying to get attention brought to it."
<<

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