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Be Careful What You Wish For

By Brian Orelli, PhD - Updated Apr 6, 2017 at 1:53AM

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Do you have the stomach to profit from swine flu?

Novartis (NYSE:NVS) investors are in a bit of a conundrum. There's potential for the company to make some extra revenue, but investors are going to have to hope that the swine flu pandemic gets worse.

A few weeks ago, Novartis, sanofi-aventis (NYSE:SNY), and GlaxoSmithKline (NYSE:GSK) were awarded contracts to produce vaccines for the U.S., and it looks like Novartis is well on its way to fulfilling its contract. The company said today that it's made enough of the viral particles needed for a vaccine to start preclinical tests. It further expects to get a vaccine into clinical trials next month, which would put it in shape to have vaccine ready for the fall flu season.

Novartis was able to get the vaccine program up and running so quickly because it's using cell culture to make it, instead of the more traditional chicken eggs, which have to incubate longer in the laboratory, so to speak. Both Baxter (NYSE:BAX) and Novavax also have technology to make vaccines that are produced in cell culture.

The World Health Organization said the flu outbreak had become a pandemic yesterday, but it's important to remember that pandemic is defined by the spread of the virus, not by its severity. And how brutal the virus is will ultimately determine how well vaccine makers will prosper during the pandemic, along with companies that sell antiviral medications like Roche and Gilead Sciences' (NASDAQ:GILD) Tamiflu.

And that's ultimately the problem with investing in the hopes of making money off the swine flu. Trying to figure out whether people will buy Apple's (NASDAQ:AAPL) new iPhone or eat at Chipotle Mexican Grill (NYSE:CMG) can be as easy as asking your friends and family what they think. Asking a virus whether it's going to mutate into a killing machine so investors can make money is a bit harder.

A pandemic of Foolishness awaits you:

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Stocks Mentioned

Novartis AG Stock Quote
Novartis AG
$87.92 (0.12%) $0.11
Apple Inc. Stock Quote
Apple Inc.
$149.24 (2.54%) $3.70
Sanofi Stock Quote
$52.90 (0.65%) $0.34
Chipotle Mexican Grill, Inc. Stock Quote
Chipotle Mexican Grill, Inc.
$1,322.06 (1.77%) $22.99
Gilead Sciences, Inc. Stock Quote
Gilead Sciences, Inc.
$63.18 (1.51%) $0.94
GlaxoSmithKline plc Stock Quote
GlaxoSmithKline plc
$44.71 (0.77%) $0.34
Baxter International Inc. Stock Quote
Baxter International Inc.
$74.34 (0.88%) $0.65

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