This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Swine Flu Biotech Bubble Primed to Burst

NEW YORK (TheStreet) -- As the most fraught influenza season since 1918 moves toward its Northern Hemisphere opening day, one outcome is perhaps more certain than any other: The hysteria surrounding the stocks of certain biotech firms will fade like summer itself.

Ever since swine flu entered the lexicon back in April, a kind of mini-bubble has developed in the shares of companies claiming to have an H1N1 fix, and that bubble seems primed to pop.

More than a few developers of antiviral drugs have seen their stocks explode on little to no evidence that their treatments have any near-term commercial prospects (see: Biocryst (BCRX)). But the case for the bubble's imminent deflation is even clearer among those companies attempting to develop novel influenza vaccines.

Swine Flu Outbreak

Traders, speculators and presumably buy-and-hold investors have piled into these shares. (Early-stage biotech, no matter the specific field, has always been closer to gambling than investing, after all.) Novavax (NVAX), a Rockville, Md.-based vaccine specialist, has seen its stock price increase 217% since Jan. 1 -- a relative laggard. Shares of Vical (VICL), a San Diego vaccine developer, have gained 256% over the same period, while Inovio (INO), also of San Diego, has exploded by 285% and Hemispherix (HEB), which has promoted its much-delayed chronic-fatigue treatment as a swine-flu-vaccine booster, has grown by a whopping 478%.

Needless to say, these stocks have outperformed the broader market.

The reason? Press releases by the bale, issued over the last five months touting this or that new study in which some new approach to flu vaccines has shown signs of not only besting the traditional vaccine methods, but of profiting big from any potential swine-flu plague.

1 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,001.22 -38.27 -0.22%
S&P 500 1,988.40 -3.97 -0.20%
NASDAQ 4,538.5510 +6.4470 0.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs