Short Term Swine Flu Trades

Many apologies for shirking my blog duties lately. I've been immersed in several business projects which are taking 110% of my time, but that doesn't mean that I'm dropping my beloved blog altogether; rather, my posts will be limited in scope for the next month or so—at least until after the LA Trader's Expo where I'm scheduled to give a workshop on June 4th. More on that as the date approaches.

Today I wanted to provide a list of quick trades that the more risk tolerant may want to consider as a play on the swine flu outbreak. Don't get me wrong, I'm not trying to make light of this subject at all and I grieve for those hundred plus people who have already succumbed to it. Let's hope and pray that this outbreak can be contained and it doesn't turn into a pandemic health crisis. Since we've been given another bowl of lemons, we could at least try to make some lemonade from it, no?

Below (click to enlarge) is a table of the major players involved in the development and manufacturing of flu-related vaccines, treatments, and tests. The major players are Gilead (GILD) and Roche (RHHBY.PK) who teamed up to make Tamiflu, and GlaxoSmithKline (GSK) which makes Relenza, an inhaler-based flu treatment. All of these stocks traded on the plus side but they weren't even close to being the biggest winners—their smaller compatriots stole that show.



Topping the small-cap flu-related biotechs yesterday were Novavax (NVAX) and BioCryst (BCRX). Both of them increased at least three-quarters in value and traded at astronomically high volumes. Both stocks gapped up on the open. From there, they meandered steadily downward closing the day near their lows. Novavax took out both its $1.75 and $3.00 resistance levels ending the day at $2.54. It's next major resistance is at $4.00 (for a gain of 57% if it hits it).

BioCryst closed at $3.88. Next point of major resistance is at $5, or almost 30% above yesterday's close. Both of these stocks are short term plays (up to resistance) unless the swine flu crops up in more places. Let's keep our fingers crossed that it doesn't. Here are the weekly charts (click to enlarge) of the above two companies with resistance levels:





These plays are not for the faint of heart, but if you have a little extra mad money, you could do worse. The good thing is that they're cheap compared with their big-pharma brothers. The bad thing is that I'm getting rather tired of drinking lemonade.

For further info on how these companies are positioned in terms of the swine flu, begin with this article that appeared yesterday in the Associated Press.

Comments

[Stocktip:]

Checkout:
www.investorideas.com/...

Relatively unknown Swine Flu Stock Play - BONU, Bioneutral Group, Inc.

Sector Close-Up, Biotech Stocks Swing with Swine Flu

POINT ROBERTS, Wash., Delta, B.C - April 27 2009 BiotechIndustryStocks.com, a global investor website for the biotechnology sector within Investorideas.com, presents a biotech stocks sector close- up on stocks moving on swine flu news and fears of a global pandemic. Companies providing potential solutions moved up as the market opened.

Biotech Stocks Sector Close-Up Trading April 27, 2009

BioCryst Pharmaceuticals Inc. (NasdaqGM: BCRX) trading up at$4.03, up $1.82 (82.35%) 10:31am ET
BioNeutral Group, Inc., (OTCBB: BONU) trading up at $0.24, up $ 0.08 (50.00%)
Generex Biotechnology Corporation (NasdaqCM: GNBT) trading at$ 0.57, gains of $0.23 (69.40%) 10:33am ET
Novavax Inc. (NasdaqGM: NVAX) trading at $3.18, up $1.76 (123.94%) 10:35am ET
Vical Incorporated (NasdaqGM: VICL) trading at$ 3.02, up $0.49 (19.37%) 10:24am ET
Company Snapshots:

BioCryst Pharmaceuticals Inc. (NasdaqGM: BCRX) BioCryst is an integrated biopharmaceutical company utilizing crystallography and structure-based drug design to develop a deep pipeline of novel therapeutics targeting major illnesses. BioCryst is currently advancing investigational new drugs discovered in-house in late-stage clinical trials for influenza and lymphoma.

BioNeutral Group, Inc., (OTCBB: BONU) is a chemical technology-based Life Science company that intends to commercialize a novel combinational chemistry-based technology which can neutralize harmful environmental contaminants, toxins and dangerous micro-organisms including bacteria, viruses, mold, fungi and spores. The formulations, including Ygiene™ and Ogiene™, which are eco-friendly and include natural and common ingredients which are found in baby products and in every day foods. The Company has combined these widely-used compounds in highly specialized ways to create products that dramatically enhance disinfecting and cleaning results; products include BioNeutralizers and ChemoNeutralizers. BioNeutral’s proprietary platform technology has been proven effective in surface, water and airborne applications.

Novavax Inc. (NasdaqGM: NVAX) Novavax, Inc. is a clinical stage biotechnology company, creating novel vaccines to address a broad range of infectious diseases worldwide using advanced proprietary virus-like particle (VLP) technology. The Company produces these VLP based, potent, recombinant vaccines utilizing new, and efficient manufacturing approaches.

PURE Bioscience (NASDAQ: PURE) develops and markets technology-based bioscience products that provide solutions to numerous global health challenges, including Staph (MRSA). PURE's proprietary high efficacy/low toxicity bioscience technologies, including its silver dihydrogen citrate-based antimicrobials, represent innovative advances in diverse markets and lead today's global trend toward industry and consumer use of "green" products while providing competitive advantages in efficacy and safety. Patented SDC is an electrolytically generated source of stabilized ionic silver which formulates well with other compounds. As a platform technology, SDC is distinguished from competitors in the marketplace because of its superior efficacy, reduced toxicity and the inability of bacteria to form a resistance to it.

Apr 28 05:57 AM

[barkingdog:]

PURE is among the most pathetic publicly traded companies. Only a fool would buy these shares. Other than a wealth creator for insiders selling stock there is no basis for this company to exist. Their P&L for more than a decade (starting in 1992) has been a JOKE with disinfectant revenue of ~ $100k per quarter telling you everything you need know. And silver dihydrogen citrate is a readily available commodity. Rest assured the swine flu outbreak will have no material impact on this company other than allowing them to sell more stock.

Apr 28 10:02 AM