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There are many strains of influenza virus, and new ones are constantly mutating. Strains of a virus tend to be organism-specific and can range in degree of infectiousness. Some, like H5N1, are found to infect mostly avian species (birds), while others, like H1N1, are more specific to swine.

When it comes to danger and mortality, not all of these viruses are created equal. Scientists track danger by mortality rate. The Spanish flu of 1918 had a mortality rate of 2.5%, while SARS was above 4%. Recently Dutch scientists have developed a strain of the flu which some claim has upwards of 60% lethality. While this strain has been kept under lock and key, others -- or nature -- have the potential of creating its equal.

In light of proof that such a deadly virus can be created, it makes sense that we expand our preparedness. In the right hands, this new virus is a tool that can be used in a secure scientific setting to develop vaccines and antivirals, which may be useful for emerging flu strains or bioterrorism. Others may disagree and move to destroy deadly engineered strains and keep the research to variants that would be less catastrophic if science went awry.

Being aware that virus strains continue to evolve is the first step. Preparedness involves keeping those stores of vaccines as current as possible. Stockpiles today may not be effective against tomorrow's influenza. Vaccine makers will have to continualy update those stores, creating cyclic revenue streams. For many pharmaceutical companies, vaccines are the cash cow which supports further drug research.

There are many ways to benefit from preparedness in your investments. Vaccines alone had a 65% annual growth rate between 2008 and 2010, with a dip in 2011. The following are public stocks that could benefit from continued preparedness.

GlaxoSmithKline (NYSE:GSK), Merck (NYSE:MRK), Novartis (NYSE:NVS), Sanofi Pasteur, a division of Sanofi Aventis (NYSE:SNY), and Pfizer (NYSE:PFE), through their acquisition of Wyeth, make most of the vaccines in the United States and around 80% of the worldwide stock. These companies have deeper pockets and the ability to test and bring a new vaccine to market with current resources. The average cost to bring any drug to the market is approaching $1 billion.

Smaller, more speculative vaccine or treatment players in preclinical or clinical trials include AVI Biopharma (AVII), BioCryst Pharmaceuticals (NASDAQ:BCRX), Dynavax Technologies (NASDAQ:DVAX), Novavax (NASDAQ:NVAX) and Vical Incorporated (NASDAQ:VICL). Most small players have a high cash burn and many rely on partnerships and milestone payments in order to stay afloat. Dilution is often an issue, and it is important to consider cost to market and cash flow positions when investing in these companies. Risk is much higher, yet success could bring substantial rewards for the investor if a little luck meets preparation and good science.

AVI Biopharma is a leader in RNA based technology. Company therapies include AVI- 7100 for the treatment of H1N1 influenza virus. Insiders have recently purchased stock, with Christopher Garabedian purchasing 300,000 shares in December 2011 and Chase Anthony purchasing 20,000 in September, which may be a good sign.

BioCryst Pharmaceuticals is working on Peramivir, which is already approved in Japan and Korea and addresses the treatment of influenza. Peramivir inhibits the interactions of an enzyme halting the spread of influenza within the host.

Dynavax Technologies is working on a universal flu vaccine to combat emerging strains of virus. If effective, it could offer protection from divergent strains, which would be groundbreaking. Currently, Dynavax is working with Novartis to evaluate the safety of combining N8295, the novel component of their Universal Flu vaccine, with an investigational H5N1 avian influenza vaccine from Novartis.

Novavax and Vical Incorporated have preclinical trials of various vaccines and separately are working on technology that can be used for faster production of vaccines targeting emerging influenza strains.

Source: Investing In Flu-Fighting Drug Makers