5 Companies That Could Develop An Enterovirus Treatment

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When it comes to the search for Ebola treatments, names like
BioCryst Pharmaceuticals, Inc.BCRX
,
Chimerix IncCMRX
,
Sarepta Therapeutics IncSRPT
and
Tekmira Pharmaceuticals CorporationTKMR
have cropped up frequently. Could these or other biotech companies also be on the forefront when it comes to another troubling biological threat: Enterovirus D68? Enterovirus D68, or EV68, has been around for decades, but until this year symptoms were nearly indistinguishable from the common summer cold. In the past few months, hundreds of cases have been reported, many of them affecting children with asthma or other respiratory issues. At least four children are reported to have died, and in a handful of other cases children now have developed what have been described as polio-like symptoms. Little has been reported about efforts to find an EV68 vaccine or treatment so far, but should the problem continue to spread, who could pursue it? Besides those companies mentioned above, other likely candidates include
AbbVie IncABBV
,
Alnylam Pharmaceuticals, Inc.ALNY
and
Gilead Sciences, Inc.GILD
, each with a foot already in the antiviral, respiratory and/or pediatrics spaces. Even the major drug companies like
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Bristol-Myers Squibb CoBMY
or
Merck & Co., Inc.MRK
could get in the race, should it appear lucrative, either directly or through a partnership with or acquisition of one of these others. See also:
What Are The Best-Selling Drugs Of 2014?

AbbVie

Among its many products are treatments for HIV-1 infection and a product that protects at-risk infants from severe respiratory disease or respiratory syncytial virus. Its market capitalization is about $87.5 billion and its dividend yield is near 3.1 percent. The operating margin is greater than the industry average and the return on equity is almost 93 percent. Note that all but two of the 10 analysts surveyed by Thomson/First Call recommend buying shares, with three of them rating the stock at Strong Buy. The share price dropped more than 6 percent in the past week but is still up more than 18 percent in the past six months. The stock has outperformed Merck and Pfizer in that time.

Alnylam

Enteroviruses are a genus of positive-sense single-stranded RNA viruses, and Alnylam develops therapeutics based on ribonucleic acid interface (RNAi). Its market cap currently is about $5.5 billion. But note that both its operating margin and return on equity are in the red. However, five of the six analysts surveyed recommend buying shares, and their mean price target suggests almost 28 percent upside potential. The share price is more than 32 percent higher than six months ago. Over that time, the stock has outperformed much larger competitors Merck and Pfizer.

Bristol-Myers

Among the offerings of this drug maker are products and candidates for HIV and hepatitis infections, as well as pediatric treatments. It has a market cap near $83.4 billion and a dividend yield of about 2.9 percent. The operating margin is greater than the industry average and the long-term EPS growth forecast is more than 13 percent. Half of the 20 polled analysts recommend buying shares, but only one rates it at Underperform. The stock climbed much of the summer, after hitting a 52-week low in June, but it has pulled back a bit in the past week. Over the past six months, the stock outperformed Pfizer, though it has underperformed the S&P 500.

Gilead Sciences

Its Tamiflu is for treatment and prevention of influenza, and Gilead has numerous products for the treatment of HIV infection, as well as candidates at various stages for treatment of HIV and respiratory diseases. Its market cap is near $157 billion, and the long-term EPS growth forecast is around 23 percent. All but three of the 26 surveyed analysts recommend buying shares, with 10 of them rating the stock at Strong Buy. Shares are up around 57 percent in the past six months, despite pulling back somewhat late last week. The stock has outperformed competitors such as GlaxoSmithKline and Pfizer in that time. See also:
Top 5 Biotech Stocks Over The Past Year

Merck

The pharmaceutical segment of this health care giant includes preventive pediatric, adolescent and adult vaccines, and it has products that treat respiratory and infectious diseases. The parent company sports a market cap of more than $1.69 billion and offers a dividend yield of about 3.0 percent. The operating margin is greater than the industry average. The consensus recommendation is to hold shares, and it has been for at least three months. The share price is more than 18 percent higher than at the beginning of the year, after pulling back less than 3 percent last week. The stock has outperformed competitors GlaxoSmithKline and Pfizer over the past six months.
At the time of this writing, the author had no position in the mentioned equities.
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Posted In: Trading IdeasAbbVieAlnylam Pharmaceuticalsbristol-myers squibbD68enterovirusEV68Gilead Sciencesmerck
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