Of course, in times of crisis, some always benefit while others take a hit, and one drug company that's done rather well by the H1N1 pandemic is vaccine-maker Novavax (NVAX).
Last week, the CEO of Novartis (NVS) -- the biggest U.S. supplier of the H1N1 vaccine -- said most of its swine flu vaccine may not reach the U.S. until the first quarter due to the lack of antigen, the key ingredient that induces immunity. SanofiAventis (SNY) is also said to have problems with yields of the vaccine, and GlaxoSmithKline (GSK) failed to get Food & Drug Administration approval for its drug.
All of these setbacks may give an opening to Novavax, based in Rockville, Md. Novavax uses a novel method -- proprietary viruslike particle technology that stimulates the immune system to develop antibodies without infecting it. This approach was found to stimulate a better response than current vaccines for seasonal influenza -- and its production is much faster. Additionally, most of Novavax's rivals are based outside the U.S. (The largest supplier of vaccine so far is Astra's MedImmune unit, which makes the nasal-spray version and is based near Novavax in Gaithersburg, Md.)
Novavax's fortunes are tangled in regulatory red tape. But on Friday, the FDA authorized the emergency use of BioCryst's (BCRX) investigational antiviral drug peramivir for hospitalized adult and pediatric patients with confirmed or suspected 2009 H1N1 influenza infections and who aren't responding to other forms of the drug. Apart from peramivir, no FDA-approved intravenously administered antivirals can treat influenza. BioCryst has donated and transferred to the U.S. Department of Health & Human Services an initial supply for 1,200 courses of peramivir and is producing 130,000 additional courses, with plans to produce even more.
NVAX shares traded about 7 percent higher in late-afternoon trading. BCRX shares jumped more than 10 percent by late afternoon trading.
If vaccine- and drugmakers are thriving as the H1N1 flu pandemic takes root, insurers are taking a beating. Health insurer Amerigroup Corp. (AGP) cut its third-quarter earnings outlook and withdrew its full-year outlook due to medical costs associated with a severe H1N1 season. The virus particularly virulent among children, pregnant women and other high-risk groups -- a category representing about 87 percent of the Amerigroup's 1.7 million members.
"In September, we experienced a spike in flu-related activity among our Medicaid members," said James G. Carlson, Amerigroup chairman and CEO. "It is difficult to determine if, and when, the situation will abate, continue at current trends, or worsen." Shares dropped over 3 percent in late-afternoon trading.
More than 11 million doses of the H1N1 vaccine have been shipped out so far, and the 16 million total doses available are not remotely close to the 195 million doses the CDC planned to have by year-end (or the 40 million to 45 million doses it had expected by mid-October). Swine flu is widespread in 46 states, with 1,000 confirmed deaths and more than 20,000 hospitalized.