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On Tuesday, the US Center for Disease Control confirmed the first case of Ebola in the country. As a result, shares of pharmaceutical companies researching a cure for the disease rose.
According to the Wall Street Journal, others have been treated for Ebola in the US after being evacuated from West Africa, but the latest patient is the first to have actually become ill within the United States. The latest case is causing fears of a greater outbreak within the country, no doubt adding impetus to the already urgent search for a cure.
Tekmira on the rise
That isn’t to say that the US hasn’t been searching for an effective Ebola treatment for quite some time already. As the International Business Times notes, pharmaceutical companies conducting research on Ebola have been given millions of dollars of funding from the government over the past decade.
Although treatments such as ZMapp and TKM-Ebola have yet to be approved by the FDA, both have been offered to Ebola patients on an emergency basis, and investors are certainly taking notice. Tekmira Pharmaceuticals (NASDAQ:TKMR,TSX:TKM) – the company behind TKM-Ebola – has gained an impressive 229 percent so far this year, and on Wednesday, Reuters reported that its shares had jumped by 30 percent during trading hours on news of Ebola’s entry into the US. The company was among the most heavily traded stocks on the Nasdaq, and at close of day, Tekmira was up 17 percent, trading at $27.85.
The BC based company has been working to advance its TKM-Ebola treatment toward approval, having secured a $140 million contract with the US Department of Defense. Tekmira began human trials for TKM-Ebola in March 2014, but the trials were put on hold in July after the FDA requested additional data to ensure the safety of volunteers. However, a little over two weeks later, the FDA partially lifted the hold so that Tekmira could potentially offer TKM-Ebola to those who had contracted the disease, highlighting the severity of the current situation in West Africa. Mark Murray, Tekmira’s president and CEO, stated in an august release, “[w]e have been closely watching the Ebola virus outbreak and its consequences, and we are willing to assist with any responsible use of TKM-Ebola.”
Others following suit
Tekmira wasn’t alone in its ascent either. Sarepta Therapeutics (NASDAQ:SRPT), which has also worked with the US military to develop an Ebola cure, was up just under 4 percent, trading at $21.88, while BioCryst Pharmaceuticals (NASDAQ:BCRX), was up 3.78 percent to $10.15, after stating on Monday that it would begin testing its own cure for Ebola in coming weeks.
NewLink Genetics (NASDAQ:NLNK), which received approval to begin phase 1 clinical studies of its Ebola Vaccine in early Septemeber, also gained around 7 percent to trade at 22.95
Interestingly, safety equipment provider Lakeland Industries (NASDAQ:LAKE) spiked nearly 30 percent on Wednesday to finish at $9.01. Though the company is not engaged in finding a cure for Ebola, it produces the hazmat suits commonly used by healthcare workers who treat Ebola patients.
Lakeland has made its role clear to investors, announcing in early September that it was increasing its manufacturing capacity for the garments. Company president and CEO, Christopher J. Ryan, stated, “Lakeland stands ready to join the fight against the spread of Ebola … With the U.S. State Department alone putting out a bid for 160,000 suits, we encourage all protective apparel companies to increase their manufacturing capacity for sealed seam garments so that our industry can do its part in addressing this threat to global health.”
Investor takeaway?
Alongside those gains, the Dow Jones Industrial Average took a dive today, plunging 38.19 points, or 1.4%, to 16,804.71 on global growth worries, according to USA Today. The S&P 500 took a less dramatic drop of just 26.13 points. Gary Kaltbaum, a money manager at Kaltbaum Capital Management, thought that the disease could be having a negative effect for many companies, stating “Ebola (is) having an effect on airlines and travel stocks, so yes that could be a component of (today’s) selloff.”
To be sure, when equities fall out of favor, investors start to look at commodities instead. And with fears of a wider Ebola outbreak mounting, pharmaceutical companies seraching for a cure could definitely be worth a look.
Securities Disclosure: I, Teresa Matich, hold no investment interest in any of the companies mentioned.