Investors are buying shares of companies that stand to benefit from Monkeypox
As health authorities around the world seek ways to stop the monkeypox epidemic, investors are snapping up shares of companies that could benefit from the race to fight the disease.
Shares of vaccine producers, antiviral drug makers and protective equipment makers are in demand as investors exploit a strategy that has generated gains during the coronavirus pandemic. Biotech company Bavarian Nordic A/S and pharmaceutical company Siga Technologies Inc. are among the targeted stocks, along with medical tools supplier Precision System Science Co.
Although nowhere as severe as the Covid-19 outbreak, the spread of monkeypox infections to more than 70 countries in just a few months prompted the World Health Organization to declare it a global emergency. This statement can give the trade an additional tailwind.
“At the moment, the world is relying on one manufacturer, Bavarian Nordic, for the monkeypox vaccine,” said Manish Bhargava, fund manager at Straits Investment Holdings Pte in Singapore. “To meet demand, we can expect other biotech companies to ramp up research and production. This is beginning to be reflected in the sector’s strong stock price performance.
Here are some sectors and companies that have been active:
Vaccines and antivirals
Shares of Bavarian Nordic more than tripled from a low in May after governments began ordering the Danish company’s monkeypox vaccine – the only one approved specifically to ward off the infection. The company has raised its revenue forecast several times this year.
Analysts are taking note, with Citigroup Inc. raising its price target for the company’s stock by 20% and signaling that there could be further upside if more orders are placed. Shares of other companies making monkeypox vaccines or antivirals have also caught the attention of US retailers. Stock at Siga Technologies, which makes a treatment called Tpoxx, has doubled this year. The therapy is approved to treat smallpox in the United States, and monkeypox and other viruses in the European Union and the United Kingdom.
Chimerix Inc.’s Tembexa is a countermeasure used to treat smallpox, and the company said in May that it would sell the drug to Emergent BioSolutions Inc. On the vaccine side, Emergent’s ACAM2000 is a vaccine against smallpox which can be used in some cases. against monkeypox. Siga, Chimerix and Emergent are the “primary beneficiaries” of the WHO’s declaration that the monkeypox outbreak is a global emergency, according to Cowen Inc. analyst Boris Peaker. “With increased resources allocated to contact tracing and testing in the EU and US, we expect the number of cases to increase significantly over the coming months, which could lead to more purchases of contraindications. -measures,” Peaker wrote in a note.