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Monday, August 28, 2006

Bird Flu Stock Flying : Sinovac

Sinovac Biotech Ltd. (SVA-AMEX), announced that the preliminary result of the Phase I clinical trial on Pandemic Influenza Vaccine (H5N1). The result proves that the vaccine with different dosages can induce an immune response, of which the vaccine contained 10ug antigen has been proved to have the best immunogenicity with the sero positive rate of 78.3%, which exceeds the EU CHMP criteria for seasonal influenza vaccines (greater or equals to 70%). There is no serious adverse event reported on the 120 volunteers and it is proved that the vaccine is well tolerated and immunogenic. Sinovac will supposedly reconstruct the seasonal influenza vaccine plant to expand the production capability for pandemic influenza vaccine (H5N1) to 20 million doses per year and thereby it allows the company to have enough stockpiling capability of vaccines for the influenza pandemic. The project is said to have an anticipated completion in 2007.

SVA shares are trading up 11% at $2.25 pre-market, and the 52-week trading range is $1.81 to $7.92. This stock is the one the street has referred to as the Chinese flu and bird flu stock. It has a mere $79 million market capitalization and is essentially not followed by major firms. The stock has been sort of in the dead zone for some time as Bird Flu has not been taking headlines and has failed to pose any real threats to humans to date. Its shares have been spending most of the summer down around the $2.00 handle. This is the sort of news that can propel shares, but US investors need to always think of caveats before trading Chinese drug company announcements when it is during the dead days at the end of August.

Does bird flu taste like chicken?

Jon C. Ogg
August 28, 2006
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