Jan 29 (Reuters) - As the Zika virus spreads from Brazil through the Americas, so too may investor attention spread to U.S. companies developing treatments, vaccines or other products tied to the mosquito-borne disease. But resulting share price improvements may be fleeting.
With no vaccines or treatments for Zika, which has been linked to a surge in babies born with unusually small heads, a scramble is on to find ways to quell the threat.
Shares of Inovio Pharmaceuticals Inc appear to be benefiting.
The company is collaborating on a vaccine that could be ready for emergency use this year, one of the product’s lead developers said on Thursday. Inovio’s chief executive, Joseph Kim, told Reuters he believed the company was “ahead of the pack” in the race for a vaccine.
The company’s shares have risen 24 percent over the past two days, in strong trading volume.
Also in the Zika spotlight is Intrexon Corp, which recently acquired a company with a genetically modified mosquito and has touted it as a tool to combat the virus, including at an investor conference earlier this month.
Intrexon shares are down 3.4 percent so far this year, though they have held up better than the Nasdaq Biotechnology index, which is down 21 percent.
Intrexon shares jumped 10 percent in strong volume on Thursday, when the World Health Organization warned the Zika virus was “spreading explosively” and could infect as many as 4 million people in the Americas.
The investment reaction is reminiscent of the deadly Ebola virus outbreak that began in 2014 and spread to the United States before being contained. Shares of some small companies that were developing Ebola treatments and related products soared during the frenzy over the disease, though some of the gains were short lived.
For example, shares of Tekmira Pharmaceuticals, the developer of an Ebola therapy that has since changed its name to Arbutus Biopharma Corp, soared 40 percent to nearly $30 in the days after the first U.S. patient was diagnosed with Ebola on Sept 30, 2014.
But Arbutus’ shares have not risen to such heights since then. Last July, when the company announced plans to change its name, it said it would focus on a cure for hepatitis B.
Shares of Lakeland Industries, which increased production for its protective suits, saw its shares quadruple in the fall of 2014 to as much as nearly $30 a share. Soon after the shares receded; they now trade at about $12.
Reporting by Lewis Krauskopf in New York; Editing by Leslie Adler