Ebola Stocks

Ebola Stocks Surge as Race for Treatment Heats Up - but Steer Clear of Overhyped Plays

The number of companies racing to find an Ebola treatment is increasing. All drugs remain in the testing stage, but that hasn't stopped investors from piling into these "Ebola stocks."

Chimerix Inc. (Nasdaq: CMRX) climbed 5% Monday following reports that the Ebola patient in Dallas is being treated with its drug, brincidofovir. And Tekmira Pharmaceuticals Corp. (Nasdaq: TKMR) soared 25% on Sept. 30 after the Centers for Disease Control and Prevention (CDC) confirmed the country's first Ebola case in a man who traveled here from Africa after unknowingly becoming infected.

In fact, there are at least seven "Ebola stocks" in the race for approved treatment, with investors making a mad dash for shares...

7 Ebola Stocks Moving Up on Treatment Race

The Worst Ebola Outbreak in History

The 2014 Ebola epidemic is the largest ever, affecting multiple countries in West Africa and spreading to other continents.

On Sept. 30, the Centers for Disease Control and Prevention (CDC) confirmed the first travel-associated case of Ebola to be diagnosed in the United States. Monday, a Spanish nurse tested positive for the virus, becoming the first person known to have contracted Ebola outside West Africa in the current epidemic.

According to the World Health Organization, some 7,470 people in West Africa are known to have Ebola. The actual number, however, is likely much higher. Cases have been missed, deaths uncounted, and "there is widespread under-reporting of new cases," WHO warns. So far there have been 3,431 reported deaths.

Tekmira Pharmaceuticals Corp. (Nasdaq: TKMR) is working in collaboration with the U.S. Department of Defense's Medical Countermeasure Systems BioDefense Office on an Ebola vaccine. In March 2014, Tekmira received "Fast Track" designation from the U.S. Food and Drug Administration (FDA) for the development of TKM-Ebola, its anti-Ebola viral RNAi therapeutic. The FDA's Fast Track is a process designed to facilitate the development and expedite the review of drugs in order to get important new therapies to patients earlier. In August, the FDA modified its clinical hold status on Tekmira's experimental Ebola treatment to partial hold, enabling it for potential use in humans infected with the virus. TKM-Ebola is currently in phase 1 of testing. The company has already treated a few Ebola patients in the United States (aid workers transported here), as well as patients outside of the United States, with some success. However, even if the CDC uses Tekmira's Ebola treatment for current or future patients, it will be on a limited basis. That's because the Canadian drugmaker would need several months or a year to make enough in order to supply a defense stockpile. Shares, at $24.86, are up a stratospheric 211.86% year to date.

Chimerix Inc. (Nasdaq: CMRX) climbed 5% Monday following reports that the Ebola patient in Dallas is being treated with its drug, brincidofovir. The Durham, N.C.-based company also announced Monday the anti-viral drug has been approved for emergency use in Ebola patients. Chimerix has brincidofovir tablets available for immediate use. Still, the drug has never been tested on laboratory animals infected with Ebola, let alone in human Ebola patients. Chimerix said it is working closely with the FDA to finalize a protocol for a clinical trial early this week to assess the safety and efficacy of brincidofovir in patients confirmed to have Ebola. Chimerix noted that clinical data collected during phase 3 testing of brincidofovir for use in patients with cytomegalovirus and adenovirus infections have shown it be safe, opening the door for an investigation into whether it's a potential therapy for Ebola. Shares jumped another 6.8% intraday Tuesday to a 52-week high of $33.61. Year to date, the stock is up a meteoric 118.80%.

Sarepta Therapeutics Inc. (Nasdaq: SRPT) in August said it has an Ebola "drug that could be deployed and shipped." The Cambridge, Mass.-based company added that any use of the drug would require waivers and approval from the Department of Defense, which paid for the development of the drug, as well as the FDA. Sarepta's Ebola treatment is promising. The drug showed survival rates of 60% to 80% in primates, versus a 0% survival rate among untreated animals. At $21.50, shares are up a modest 6.23% year to date.

NewLink Genetics Corp. (Nasdaq: NLNK) is working to boost capacity to make Ebola vaccines, with a goal of a "very significant increase in scale during the first half of 2015." In August, the Ames, Iowa-based company, which licensed an Ebola vaccine developed by Canadian government scientists, said it had enough doses on hand to launch the first human safety trial of an Ebola vaccine. The company lined up two to three contract manufacturing companies and said it will be able to produce tens of thousands of vaccine doses within "the next month or two." New Link is conducting phase 1 trials in more than 10 sites in Africa, Europe, and North America. After sizable gains, NLNK shares have settled down and are off 4.04% year to date.

BioCryst Pharmaceuticals Inc. (Nasdaq: BCRX) is another biotech with a pipeline drug that has shown promise in fighting Ebola. In March, the Durham, N.C.-based small cap reported that its drug in development, BCX4430, protected rodents against Ebola infections. BRCX shares are up 53.68% year to date.

Johnson & Johnson's (NYSE: JNJ) Crucell unit is working on an Ebola vaccine combination with a company called Bavarian Nordic. The vaccine combination targets the Zaire species of Ebola, which is now spreading through West Africa. J&J said the vaccine worked well in tests on macaque monkeys. If all goes as planned, the vaccine could be tested in humans starting in the first half of 2015.

GlaxoSmithKline Plc. (NYSE ADR: GSX) is working with the U.S. National Institutes of Health's Vaccine Research Center to advance development of an early-stage vaccine candidate for Ebola. Its vaccine contender has shown promising results in pre-clinical (non-human) studies and is being tested in small phase 1 clinical trials in healthy volunteers in the United States and U.K. GSX is manufacturing 10,000 doses of the vaccine. Its use, however, hinges on results of the trials.

Private companies working on an Ebola treatment include ZMapp of San Diego. The biopharmaceutical company said Sunday that doses of its experimental drug are used up and are "not going to be available anytime soon." Protein Sciences of Meriden, Conn., meanwhile, said it should have an Ebola vaccine test in December.

But moving on hype alone, as in the case of Ebola stocks, is a bad bet for investors.

"For most retail investors, I wouldn't be putting in money right now," Money Morning Defense & Tech Specialist Michael A. Robinson told FOX Business Tuesday. "These are all on an experimental basis. There are a lot of clinical trials to go through." See Michael's full interview in the video at the beginning of this article.

Now: "Ebola stocks" are getting a lot of press right now, but no matter who is the first to develop an approved Ebola treatment, this medical tech leader is already set up to treat the next major outbreak - and deliver huge gains to investors...

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