The World Health Organization yesterday raised the swine flu risk level to Phase Five, one level away from declaring a pandemic.
Companies, organizations and schools are taking more drastic measures after people have tested positive for the disease.
Bloomberg reports, “Fort Worth, Texas, closed 144 public schools with 80,000 students after one child came down with swine flu. Citigroup Inc. disinfected a New York office building when a worker became ill, and dozens of U.S. Marines are quarantined after a soldier tested positive for the virus.”
About 154 people worldwide have been confirmed to have the virus, despite the large number of people with symptoms. These cases are scattered over eleven different countries.
Pandemic alerts have strong implications for travel, though the WHO does not recommend travel restrictions. Margaret Chan, director-general for the WHO, says travel restrictions do not stop the spread of the disease.
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The Wall Street Journal quotes Julian Jessop, from Capital Economics:
The main economic damage has typically come from panic measures to control a potential pandemic rather than direct impact of the disease itself. In the current outbreak, aside from some quite reasonable precautions in Mexico City itself, the wider fall-out has been limited. Even the World Health Organisation, which has declared a “Public Health Emergency of International Concern,” is not recommending any travel or trade restrictions in response to swine flu.
This hasn’t stopped the major airlines from falling… They have declined another 1.34% today.
But while economic damage may be limited, individual companies, particularly in the drug industry might benefit from this outbreak.
Fortune Magazine with CNNMoney reports, “The rush to respond to the swine-flu outbreak could provide an opportunity for vaccine and antiviral developers to showcase new biotechnologies sooner than expected.”
There is no vaccine yet for this virus so the door is wide open for drug companies.
Novartis (NVS:NYSE) says its avian flu vaccine could help find a vaccine for swine flu. “The findings published about the H5N1 vaccine suggest a way forward for the present swine flu outbreak,” Rino Rappuoli, head of research at Novartis Vaccines told MarketWatch.
“The Centers for Disease Control and Prevention have 50 million treatment courses of such drugs as Tamiflu and Relenza. The agency says lab tests show the swine flu virus is ‘sensitive’ to those treatments,” reports Fortune.
Roche Holding (ROG:Switzerland) makes Tamiflu and GlaxoSmithKline (GSK:NYSE) makes Relenza.
Adam Lass, editor of WaveStrength Options Weekly, writes, “This flu is no ‘head fake.’ Rather it is a real disease that is already spreading globally, and can kill humans (albeit primarily poor folks who cannot obtain adequate medical treatment).”
He tells his readers that GlaxoSmithKline might be the better option. He says, “While both companies are pledging to ramp up production to meet global needs, … Relenza was actually moving ahead of Tamiflu sales-wise.
“The World Health Organization reports that the common seasonal flu virus, H1N1, has become resistant to Tamiflu. The concern now is that this new round of swine flu may actually be able to swap genes with H1N1, and acquire that same resistance. This threat is causing many countries central health ministries to prefer Relenza over Tamiflu.”
Adam’s service recommends options on major blue chip companies like GlaxoSmithKline. For more details you can visit his WaveStrength Options Weekly Web site.
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