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Though it’s pretty much the same boilerplate caution from last year (and the year before that, and the year before that …), this one has been penned a bit earlier than usual, reflecting a relatively early start to this year’s flu season. So, get your shot, wash your hands, use a tissue, and … pick the right stocks?
It might be a trade that’s wedged in somewhere between “blatantly obvious” and “cliché,” but certain pharmaceutical stocks do indeed get an annual flu bump around this time of year. So, if it’s going to happen, you might as well play it.
As is so often the case, though, picking the winner is the real trick. You might want to look smartly before you leap, since not every flu vaccine maker actually has a product that has been officially approved as a flu vaccine in the United States for the 2012-13 influenza season.
Here’s a rundown of the names the CDC has given the green light to this time around:
Novartis
Though Novartis might seem like a leading name in the vaccine world, using it as your flu vaccine play might not be highly effective. See, the company’s entire vaccine portfolio only makes up about 5% of Novartis’ annual revenue. And, only about a quarter of that 5% is driven by flu vaccines. That’s just a tad over $700 million for a company that does nearly $60 billion in sales per year. Even the recent approval of Flucelvax (which doesn’t use eggs to incubate the vaccine) isn’t apt to make a big dent this year.
Nevertheless, Novartis’ Fluvirin has gotten the CDC’s nod of approval. The vaccine should generate worldwide sales of $359 million in 2012.
GlaxoSmithKline
Don’t get confused about the flu vaccine’s maker here. A company called ID Biomedical manufactures FluLaval, but that’s a subsidiary of Glaxo’s thanks to a 2006 acquisition.
Some experts predict $375 million worth of FluLaval sales this year, though again — not a big chunk considering GSK’s $27 billion in annual revenues.
Sanofi
Sanofi also makes several other influenza vaccines, including Intanza (IDflu), Panenza, Humenza and Vaxigrip (Mutagrip), though you should note that not all of those are used in the United States.
Either way, Fluzone is the company’s flagship drug in the category, with 2012’s likely global revenue approaching $1.343 billion.
Merck/CSL Limited
Most investors don’t realize that Australia’s CSL is actually one of the world’s bigger flu vaccine manufacturers. It just doesn’t market much under its own name. The company sold $130 million worth of Afluria worldwide in 2010, with Merck selling $56 million worth in the United States (as FluVax) that year.
While CSL Limited is one of the more compelling ways to play, it’s also only available via either thinly traded pink-sheet stocks or the Australian stock exchange.
AstraZeneca
MedImmune is the maker of the popular FluMist, which is administered as a nasal spray rather than an injection. Sales of FluMist totaled $145 million in the third quarter, and $161 million for all of last year.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.