Detection, Vaccine Firms See Benefit
Wednesday October 10, 1:03 pm Eastern Time
By Jed Seltzer and Edward Tobin
NEW YORK (Reuters) - Shares of companies that could be enlisted to detect biological attacks and treat its victims soared in Wednesday trading, as U.S. fears of a biochemical attack were fueled by recent anthrax cases in Florida.
Several of the firms have already received contracts to produce vaccines and diagnostic devices, such as Nanogen Inc. (NasdaqNM:NGEN - news) and AVANT Immunotherapeutics Inc. (NasdaqNM:AVAN - news), which announced government-related pacts on Wednesday.
Shares of detection system maker Nanogen rose 60 percent, or $3.36, to $8.94, while shares of vaccine developer AVANT rose 67 percent, or $1.99, to $4.94 on Nasdaq.
Nanogen said it received a $1.5 million grant from the U.S. Army to continue development of its biological warfare detection systems, while AVANT said it had signed a contract with a firm licensed by the U.S. Department of Defense to create vaccines against infectious diseases.
AVANT's stock reached $6.93 earlier in the session.
``The wild card is that if fears continue to grow about how likely an attack of this nature is, you may get to the point where the government decides to throw a bunch of money at this and that is where people are speculating,'' said Dougherty & Co. analyst Aaron Lindberg.
Detection systems maker American Access Technologies (NasdaqSC:AATK - news) said on Tuesday it received a government order to make 7,000 alarms that detect chemical warfare agents.
The company's shares have more than tripled in the past three days and earlier Wednesday were up 10 cents, or 2.55 percent, to $4.02 in trading.
Other small firms have not announced new contracts but their stocks have still ascended on the hopes that they will see increased revenues from initiatives to improve the nation's ability to cope with biochemical attacks.
Shares of Cepheid Inc. (NasdaqNM:CPHD - news) soared to $10.50 in Wednesday trading from a close of $3.37 on Friday. The stock rose 86 percent on Tuesday and another 27 percent in trading Wednesday.
Cepheid develops genetic profiling and detection systems for contaminants and biological agents. The Sunnyvale, California-based company makes Smart Cycler, a DNA detection system that searches for the presence of targeted substances, such as anthrax.
``The valuations here are getting stressed at these levels,'' Lindberg said. ``If you look at a firm like Cepheid, it is looking at a $230 million market cap with $8 million in revenues this year. That being said, they have got a leading technology, and this is obviously an area of keen interest now.''
SIGA Technologies Inc. (NasdaqSC:SIGA - news), which is developing anti-infective treatments, has seen its stock rise more than 80 percent in the past two weeks, to $4.16 from a close of $2.29 on Sept. 26.
And biotechnology companies outside the United States are also benefiting from speculation that increased terror attacks will spell contracts to provide diagnostics and drugs.
Shares in Danish biotechnology firm Bavarian Nordic , which makes smallpox vaccine, and British group Biotrace International Plc (quote from Yahoo! UK & Ireland: BOI.L), which supplies testing kits, have both surged since the Sept. 11 attacks.
Acambis Plc (quote from Yahoo! UK & Ireland: ACM.L), another UK firm, has seen its stock leap nearly 80 percent on speculation the U.S. government will bring forward orders for smallpox vaccine under an existing contract. |
