Stock Market Investing Advice

The Obama Administration has a different set of national defense priorities than the prior administration. These shifts in priority could represent an opportunity for investors interested in biomedical programs and products. With less emphasis on missiles and bombs and more on diplomacy, the new administration is likely to be friendly to innovative technologies contributing to both public health and defense against disease outbreaks, whether.

There are several companies well positioned to play an important role in government programs to prevent and contain disease outbreaks. Most of the companies that specialize in these programs are still small and their stock can be purchased at reasonable prices with the expectation of growth as research programs and product development initiatives mature.

Emergent Biosolutions, traded on the New York Stock Exchange under the symbol EBS, is the largest and best known of the biodefense specialty companies. This company has done an impressive job of landing large government contracts, and has many years of experience in the production of vaccines. Their product is the only vaccine approved by the U.S. Food and Drug Administration to prevent anthrax infection. Emergent has additional programs to develop vaccines for botulism, tuberculosis and other infectious diseases of both defense and public health importance. Bucking the overall market, Emergent’s stock price has generally increased during the recent global downturn.

iBioPharma, Inc., traded on the OTC Bulletin Board under the symbol IBPM, is a newcomer to the public stock markets, but not to biodefense research. This company recently became public as a result of a spin-off from a larger, long-standing company primarily focused on other markets. The stock price dropped significantly after the spin-off, probably due to existing parent company shareholders who had no interest in biotechnology or biodefense converting their new shares into cash. In an exclusive relationship, a well established research institute provides iBioPharma with patents, technology, and product candidates, including influenza, plague, and anthrax. The U.S. government has partially funded iBioPharma’s technology.

PharmAthene, traded on the AMEX exchange under the symbol PIP, was formed in 2001 and is developing products for defense against both biological and chemical products. Initially backed by private venture capital funds, PharmAthene became public in 2007 through a reverse merger with Healthcare Acquisition Corporation. The price of PharmAthene’s stock has dropped along with the rest of the market, despite significant government funding commitments tied to the achievement of various scientific benchmarks.

Trackback URI | Comments RSS