A number of healthcare-related stocks jumped on Tuesday after the United States confirmed the first outbreak of a deadly Chinese virus that has spread into the country. The Centers for Disease Control went on to state that the first case of the new coronavirus – also known as 2019-nCoV – has been diagnosed in a Seattle resident that had just arrived back home from a trip to China.
The virus, which originally spread from the city Wuhan, has already infected 300 people and led to six deaths. Neighboring North Korea ended up shutting down its borders to the limited number of foreign tourists it receives due to the possibility of a potential outbreak. Symptoms tend to match other common ailments, including coughing and fever, but also include respiratory problems such as difficulty breathing. Serious complications include severe pneumonia and possible death.
Many small-cap biotech stocks that specialize in treating viral infections ended up surging in response to the news. The biggest winner of these was a small company known as NanoViricides, whose shares shot up over 150% following the news of the China virus outbreak in the U.S.
The reason for this jump is that during medical emergencies such as these, governments tend to fund the companies that develop and distribute treatments to these diseases. Wall Street analysts are already optimistic about what this could mean for many of these experimental vaccine developers, as some of the small, micro-cap stocks in this field can see a significant upside if they are one of the first to effectively respond to this new virus.
“If this becomes a bigger issue wherein a government supplemental funding bill comes out (like we saw for pandemic flu and Ebola), then it could be a positive for those companies. But we are a long way from that in my view,” said Chris Meekins, an analyst at Raymond James. “Markets tend to bottom with the peak in new cases and news flow. A positive bias is appropriate on pharma stocks broadly and makers of diagnostic kits and protective equipment,” added analysts from J.P Morgan in light of this news.
While NanoViricides was the biggest winner in light of this news, other biotech stocks ended up jumping as well. This includes Novavax, Inovio Pharmaceuticals, and BioCryst Pharmaceuticals, which are all up 43%, 10.7%, and 20.9% respectively. Until things settle down, there’s also the risk that the China virus can spread to other nations, leading to additional outbreaks that further drive demand for a vaccine treatment. Time will tell whether or not governments will be able to prevent further infections, but many are worrying that it’s already too late to do a much wider outbreak.
NanoViricides Company Profile
Nanoviricides Inc is a nano-biopharmaceutical company which is engaged in discovering, developing and commercializing therapeutics to advance the care of patients suffering from life-threatening viral infections. The company engaged in the application of nanomedicine technologies to the complex issues of viral diseases. It focuses its research and clinical programs on specific anti-viral therapeutics and is seeking to add to its existing portfolio of products through its internal discovery and clinical development programs and through an in-licensing strategy. – Warrior Trading News
