Will monkeypox outbreak boost the shares of some companies? Read here

Shares of vaccine producers, antiviral drug makers and protective equipment manufactures witness an active demand as these delivered gains to investors during the Covid-19 pandemic

Livemint
Updated31 Jul 2022
Investors are bagging up the shares of companies in various sectors that could benefit from the race to quell the monkeypox disease. (istockphoto)
Investors are bagging up the shares of companies in various sectors that could benefit from the race to quell the monkeypox disease. (istockphoto)

Amid the monkeypox outbreak across the world, investors are bagging up the shares of companies in various sectors that could benefit from the race to quell the disease. According to news reported by Bloomberg, shares of vaccine producers, antiviral drug makers and protective equipment manufactures witness an active demand as these delivered gains to investors during the Covid-19 pandemic.

The companies with high demand of shares include biotechnological company Bavarian Nordic A/S, pharmaceutical firm Siga Technologies Inc and medical tools supplier Precision System Science Co.

The latest monkeypox outbreak that has already hit more than 70 countries and has been declared a global emergency by the World Health Organization (WHO), may give trade an extra tailwind, according to Bloonberg.

Manish Bhargava, a fund manager at Straits Investment Holdings Pte in Singapore said that the world is relying only in one manufacturer at the moment, that is, Bavarian Nordic for the monkeypox vaccine, hence, the investors can also expect other biotech companies to ramp up the research and production of related products. He said that it is automatically starting to reflect in the strong stock price performance for the sector.

Take a look at some sectors and companies that has been active,

1) Vaccines and Antivirals

After the governments started ordering the Danish company's monkeypox vaccine, the shares of Bavarian Nordic company have been tripled from a low in May. Danish company's vaccine against monkeypox virus is the only one approved to ward off the infection at present.

Analysts suggest that Citigroup Inc. is increasing its target price for the company’s stock by 20%, hence, there may be further rise if more orders come through.

The shares of other medical companies producing vaccines or antivirals for monkeypox infection have also caught the attention of US retail traders. These companies are Siga Technologies (manufacturer of a treatment called Tpoxx), has doubled this year, Chimerix Inc.’s Tembexa (treatment being used for smallpox), and Emergent’s ACAM2000 (vaccine utilized in some cases of monkeypox).

Meanwhile, Japan has also started research on smallpox vaccines to prevent the spread of monkeypox outbreak in the country. This may ignite the interest of investors in Meiji Holdings Co. as its unit KM Biologics produces a smallpox vaccine.

2) Virus Detection

Investors are also focusing on the companies that provide virus testing kits and tools. The shares of Precision System in Japan, which manufactures medical testing equipment, have almost doubled since late June, according to Bloonberg. On the other hand, Switzerland's Roche in May had said that it had developed three test kits for the detection of monkeypox virus.

In China, over 30 companies have obtained EU certification for their monkeypox testing kits. These include Autobio Diagnostics Co., Shanghai ZJ Bio-Tech Co. and Daan Gene Co. Shanghai ZJ has climbed almost 40% in July. The manufacturers of makers of antigen and antibody test kits such as Zhejiang Orient Gene Biotech Co. and Assure Tech (Hangzhou) Co. are the other potential beneficiaries.

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