Winning from Boosting Good Cholesterol (RVXCF, RVX, PFE, AZN, MRK)
BioHealthInvestor usually sticks to US companies or at least sticks to ADRs for investors. But sometimes there is a much larger bit of data either north of the border or in Europe. There is a company called Resverlogix Corp. which trades in Canada under the ticker ‘RVX’ and the stock also trades in the US on the Pink Sheets under the ticker ‘RVXCF.’ The stock is soaring today after Bloomberg gave a very positive article highlighting the merits of the company’s RVX-208. This potential drug candidate is targeting atherosclerosis in acute coronary syndrome patients. The target is to raise HDL levels to effectively reverse arterial plaque buildup. The company noted that there are approximately 350 million patients that require treatment for atherosclerosis.
We wanted to take a look at the potential for this drug candidate outside of what the article has to offer. Resverlogix is a clinical stage Canadian company which currently has no real products. The company has been public since late 2004. It has traded well under $5.00 and at ome point briefly rose to north of $20 per share in 2007.
Late in February, the company officially activated the first site for the ASSURE 1 trial and commenced enrollment of patients for dosing of RVX-208. This is the second Resverlogix Phase 2 clinical trial, led by Cleveland Clinic, and it will examine and evaluate this oral small molecule therapy for the treatment of atherosclerosis in patients with acute coronary syndrome.
As per the trial data:
This IVUS study is comprised of 15-20 US sites will dose approximately 120 ACS patients on standard of care therapy and examine lipid effects by RVX-208 compared to placebo control. In half of the patients a change in atherosclerosis will be assessed, i.e. change in plaque volume and plaque composition. The primary objective of this study is to determine the 3 month effect of RVX-208 on change in the plasma levels of ApoA-l in patients with a recent ACS event who require coronary angiography versus placebo. The secondary objectives for this study include assessing the safety and tolerability of the drug through evaluation of adverse events as well as to evaluate the effect of RVX-208 on other lipid parameters.
Here is the catch, and the ultimate factor which makes this a potential Holy Grail… Most cholesterol medications today are used as preventative medicine rather than just for treating those who have already had a stroke or heart attack or those who already have severe blockage. Statins and other lipid lowering agents account for billions and billions of dollars per year in revenues for Big Pharma. If this drug is ultimately approved for preventative measures the sky is the limit.
AstraZeneca (NYSE: AZN) has Crestor; sales of Crestor are forecast to reach $6.5 billion in 2013, up from $4.5 billion in 2009, per Thomson Reuters.
Pfizer Inc. (NYSE: PFE) has Lipitor; Lipitor brought in approximately $11.4 billion in revenue in 2009.
Merck & Co. (NYSE: MRK) has Vytorin; Annual worldwide sales for 2009 were $2.2 billion for ZETIA and $2.1 billion for VYTORIN.
The statin market is also coming under some generic pressure.
There are risks here. Many have tried this HDL raising tactic and targeting plaque. None of the existing drugs have effectively proven to be the ultimate plaque-eater. Pfizer has so far spent billions. This is a hopeful treatment but it is going to be some time before the results of a larger study are known and it will be far longer before the side effects are known.
Stay tuned.
JON C. OGG
Rigel Attacks Rheumatoid Arthritis with AstraZeneca (RIGL, AZN)
Rigel Pharmaceuticals (NASDAQ: RIGL) may be the biotech winner this Tuesday. The company has signed a pact with AstraZeneca (NYSE: AZN) which could ultimately bring in about $1.25 billion if all targets are met. This pact is a licensing agreement for Rigel’s rheumatoid arthritis drug R788 or fostamatinib disodium.
Rigel said last year that its R788 significantly improved rheumatoid arthritis symptoms in patients in a phase II study and Rigel has been seeking a development partner to help finance phase III studies.
AstraZeneca will design a global phase III study for the RA drug and believes that the study will be initiated in the second half of this year. We will double-check the goal dates here because the new drug application target date appears to be 2013 for the FDA and European Medicines Agency.
AstraZeneca is making an upfront payment of $100 million as the first part of the pact. There is also an additional amount which can go up to an additional $345 million if certain milestones are achieved. But the big kicker here for Rigel comes in the form of up to an additional $800 million if specific sales are achieved as well as significant stepped double-digit royalties on global sales.
Rigel had a market cap of about $488 million based on a close of $9.43 on Friday. The company effectively has no sales and its September-2009 balance sheet lists approximately $156 million in cash and short-term investments with effectively no considerable long-term debt.
Rigel closed at $9.43 on Friday and we have shares trading up 6% at $10.00 ahead of the opening bell. Its shares have traded in a range of $4.19 to $14.75 over the last 52-weeks.
JON C. OGG
FEBRUARY 16, 2010
Diabetes & Insulin War About To Heat Up (MNKD, LLY, NVO, PFE, BMY, AZN, GERN)
MannKind Corp. (NASDAQ: MNKD) has not gone without its critics over the company’s inhaled insulin. The company has an upcoming review that will be a make or break event for the company. The company is about to face a potential do or die test next week as the FDA is set to decide the fate of the company’s inhaled insulin. MannKind’s Afresa is designed to deliver a fast acting insulin that is supposed to be more effective than the injected products. This would put the company in competition for insulin with Eli Lilly & Co (NYSE: LLY) and Novo Nordisk (NYSE: NVO) for their insulin delivery.
One of the biggest hurdles MannKind faces is that inhaled insulin products have been tried and tested by others, and they have failed or have fallen far short of the expectations set ahead of time. Pfizer Inc. (NYSE: PFE) discontinued its Exubera as an inhalable insulin.
- Lexicon Pharmacueticals (NASDAQ: LXRX) had a favorable Phase I reaction late last year in type 2 diabetes mellitus.
- These companies are all also fighting for their part of that next $170 billion market opportunity.
- Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN) already received FDA approval for Onglyza as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes.
- Geron Corporation (NASDAQ: GERN) is still a ways off for the stem cell angle here compared to its other stem cell endeavors, although you never know when stem cell companies will make periodic announcements.
The FDA is set to make a ruling on Afresa’s approval by January 16, which means that the JAN-2010 CALL options may or may not expire before such ruling is made. The FDA can always delay, and some reports hint at a later date now.
Read more
Do Flu Vaccines Need to Worry About Pain Killers? (GSK, AZN, SNE, NVS)
There is an interesting release out today showing that research from the University of Rochester Medical Center shows an inverse relationship between some of the more common pain killers or relievers and the effectiveness of flu shots. While this does not impact the need for flu vaccines and while this probably won’t impact the sale of flu vaccines by any doses, it does highlight that flu vaccines might not be as effective under a very common circumstance. It also shows how these pain killers might inhibit some of the body’s defenses in general. The study shows that the use of common pain killers to the likes of Advil, Tylenol, and aspirin at the time of a flu shot injection may actually blunt the effect of the shot. It also noted a negative immune system response.
This has been studied for years by a Dr. Richard Phipps and the findings were presented at an international conference on inflammatory diseases. The study data also corresponds to a report in The Lancet from last month by researchers out of the Czech Republic.
The companies most tied to seasonal flu vaccines are large diversified international conglomerates GlaxoSmithKline Plc (NYSE:GSK), AstraZeneca Plc (NYSE: AZN) via MedImmune, and Sanofi-Aventis (NYSE: SNY). Novartis (NYSE: NVS) also recently said that the backlog Of Swine-Flu vaccine orders would be filled by January, but unfortunately that is after many flu contractions will have been seen. It is a flu vaccine supplier.
Again, this won’t likely have any impact on the sales of vaccines that are already in very short supply. But it is important to consider if you are taking a flu vaccine or if you are ill. Particularly so when you consider that many ill and not so ill people take these three pain relieves and pain killers routinely.
JON C. OGG
BioHealth Job Cuts Keep Coming (AZN, PFE, BSX, BMY, LLY, JNJ)
It used to be that pharmaceutical jobs and medical device maker jobs were among the best and most immune of all sectors in the economy. They paid well, there was job security, the benefits were solid, stock option and retirement plans were always growing, and on. That is still the case in many positions inside those companies. But mergers, competition, efficiency, redundancy, and a new spending environment are changing this for many jobs in these once-safe sector.
Mergers have led to many “efficiencies” to be realized, and allowed “redundancies” (i.e. low-yield jobs and departments) to be eliminated. And now there is an ongoing threat to the sector from Washington. While the target has gone away from all of healthcare to health insurance, we are still seeing the announcement from major companies of more job cuts. We have compiled a few of the latest found announcements, ad this is just a part of the whole pie.
AstraZeneca PLC (NYSE: AZN) is reportedly offering buyouts “to thousands of its near-5,000 workers” from its U.S. sales force.
Pfizer Inc. (NYSE: PFE) has outlined more job cuts from its Wyeth combination as part of a projected 15% cut to the combined Pfizer-Wyeth team. What this number will ultimately come to is still unknown, and Pfizer’s head count had already fallen by over 6,000 to 75,400 at the end of last quarter.
Boston Scientific (NYSE: BSX) had job cuts a couple years ago, and it appears that the job cuts may not be over. Recent health reform legislation from the Senate Finance Committee was noted by its CEO as being an event which could potentially trigger another 1,000 to 2,000 job cuts.
Bristol-Myers Squibb Co. (NYSE: BMY) has been in an ongoing 10,000 layoff mode since last year, but in the last week came word that about 25% of its Abilify antipsychotic drug sales force after an evaluation from its co-marketing pact with Otsuka Corp. These were recent cuts and are still unquantified.
Eli Lilly and Co. (NYSE: LLY) announced last month that it is targeting $1 billion in savings… with the elimination of up to 5,500 jobs total by some time in 2011.
This summer came the announcement from Johnson & Johnson (NYSE: JNJ) about its plan to cut up a range of 3,615 to to 4,800 jobs. That is a small amount considering the number of deals it has made and considering it has 120,000 employees.
JON C. OGG
OCTOBER 20, 2009
Dendreon Merger Rumors Stay Alive (DNDN, SNY, AZN, RHHBY)
As far as whether a deal is really imminent for Dendreon Corp. (NASDAQ: DNDN) in this rumored buyout is coming is still a topic up for debate. We still have a Caveat Emptor flag here, but the trading in this name is just too hard to not notice now that the stock price and market cap is getting so high.
We saw a greater than 10% gain on Monday to where it closed at the highest closing of the year at $27.43. Of course it sold off, but throughout the day Dendreon shares have climbed and the stock is now up 9% at $29.23 on well above average volume.
We have seen over 30,000 options contracts trade hands for the September Calls alone against almost no Put volume. That is over 3 million shares on a fully leveraged basis. What is so interesting is that these options are all set to expire in just over 48 hours. If no deal is announced or leaked out early Friday, then those will all expire as worthless if out-of-the-money or at the intrinsic value if they are in-the-money. So again, this suggests that something is imminent if you only watch stock options.
Again, Sanofi-Aventis (NYSE: SNY) is the most widely thrown out name as a European buyer that can get companies on sale in the U.S. over a weak US Dollar. But Roche (RHHBY) for its Genentech unit and AstraZeneca plc (NYSE: AZN) have been pondered before.
PROVENGE is believed to be getting FDA approval, but this is still not a formally approved event. Roche already took that chance on Genentech ahead of a key independent study ahead of the panel releasing data that was shocking as Avastin turned out to not be good at using in patients with the aim of maintenance or future cancer prevention. The market cap here is now $3.3 billion, and the price is getting to be in the realm of gambling when considering the FDA-risk that is inherent in any pre-revenue stock in the biotech realm. And any merger has to come at a premium to get shareholder approval.
Caveat Emptor!
JON C. OGG
Exploring Chances of Dendreon Rumors (DNDN, SNY, AZN)
We have been digging into ‘rumors’ of a Dendreon Corp. (NASDAQ: DNDN) buyout. We would stress that Dendreon has been the subject of rumors before as both a partnership or stake-taken deal, and sometimes as merger-buyout bait, several times in the past. As with all rumors and with all ‘hope’ trades like this, Caveat Emptor!
That being said, the stock volume is exponential, but the most impressive activity is in the SEPT-2009 call options. The reason this is of such notice is because the September options expiration date is only four short days out, meaning that the bets for or against a deal would suggest an “imminent” timing if it was accurate.
We noticed a blurb out there today noting that Sanofi-Aventis (NYSE: SNY) was the likely party…IF… the rumor is correct. In the past we have also heard of Roche/Genentech as a potential rumored buyer. One name also thrown out as an acquirer of small to mid-cap biotech companies is AstraZeneca plc (NYSE: AZN). To date, all such rumors have been unfounded and never materialized. We would also note that with shares up above $26.50, they are also back very close to the old intra-day high of $27.40. The old high closing levels were $26.08 on June 19… On April 29 this hit the $27.40 intra-day high but the close was $22.94; and the last day this hit $27.00 was June 7, but it closed at $25.74.
The biggest hurdle to date is that a buyer would be forced to pony-up much more cash than today’s price. The buyer is also taking a big FDA event-risk as PROVENGE is still ‘believed to be approvable’ and has not received FDA approval as a last line of defense for men with advanced prostate cancer. Roche took that risk with Genentech, and while everyone believed that the endpoint was likely it turned out to not be the case.
Anything is of course possible in the land of the biotech rumor-mill. Again, Caveat Emptor!
JON C. OGG
Seattle Genetics' Boosted Secondary… Takeover Defense? (SGEN, BMY, MEDX, BAY, CRGN, PGNX, AZN)
Seattle Genetics, Inc. (NASDAQ: SGEN) is one of those companies in the world of biotech and biohealth which some have believed would be an ultimate takeover target. The issue is that some companies either do not have enough funding on their own to secure a deal under the terms they would prefer. Other companies want to grow and thrive on their own in the quest to become the next mega-blockbuster producer on the block. So the news of an offering of common stock from Seattle Genetics, Inc. would now put the company in the second category, or so it may seem.
Seattle Genetics priced a secondary offering of 11,000,000 shares of common stock at $10.75 per share. The gross proceeds from the sale are expected to be approximately $118.2 million and should close on or about August 17, 2009. The good news is that all of the shares in the offering are being sold by Seattle Genetics. The other bit of good news is that the demand must have been strong. The announcement was made Monday that it would sell 9 million shares, yet this pricing is for 11 million shares.
The company said that the use of funds will be used to fund R&D, including manufacturing activities and clinical trials for its proprietary product candidates, build-out of a commercial infrastructure and for general corporate purposes, including working capital.
The company also has a very high profile group of companies as the underwriters.
J.P. Morgan and Goldman Sachs are the joint book-running managers; Needham, Oppenheimer, RBC Capital Markets, and William Blair are all listed as the co-managers of the offering. The underwriters have a 30-day option to purchase up to 1,650,000 additional shares of common stock to cover over-allotments.
Back in July this stock was under $10.00. Then came several developments. It reported earnings, Bristol-Myers Squibb (NYSE: BMY) announced the acquisition of Medarex (NASDAQ: MEDX), then the company announced the initiation of Phase II trials of brentuximab vedotin (SGN-35) for lymphoma. Then this week came the announcement that Seattle Genetics had achieved a milestone under its antibody-drug conjugate (ADC) collaboration agreement with MedImmune, LLC, a wholly owned subsidiary of AstraZeneca, after MedImmune’s initiation of a phase I clinical trial of MEDI-547 for solid tumors.
Seattle Genetics has an exclusive worldwide collaboration agreement with Roche’s Genentech for the development and commercialization of dacetuzumab (SGN-40). Under the agreement, Genentech paid us $60 million upfront, and has agreed to pay potentially more than $800 million in milestones and escalating double-digit royalties starting in the mid-teens on annual product sales. In addition, Genentech funds research, development, manufacturing and commercialization costs. Seattle Genetics also has an option for co-promotion rights on dacetuzumab in the U.S.
The company has licensed its antibody-drug conjugate (ADC) technology to Genentech, Bayer (NYSE: BAY), CuraGen Corp. (NASDAQ: CRGN), Progenics Pharmaceuticals Inc. (NASDAQ: PGNX), Daiichi Sankyo, AstraZeneca’s (NYSE: AZN) MedImmune, and Takeda’s Millennium. These collaborations all involve upfront cash payments, milestones and royalties on net sales of products incorporating Seattle Genetics’ ADC technology. The licensees are responsible for development, manufacturing and commercialization of any ADC product candidates that result from the collaborations.
Another deal is in place as a co-development agreement with Agensys, a wholly-owned subsidiary of Astellas Pharma. In this the companies will jointly develop ADC products where Agensys provides proprietary targets and monoclonal antibodies to be utilized with Seattle Genetics’ proprietary ADC technology. The companies share research and development costs on up to two ADC products, and share equally in any profits.
Shares closed down over 7% at $10.99 in anticipation of the secondary offering and the stock’s 52-week range is $6.81 to $13.40. The company has been public since 2001 and has spent the bulk of the time from early 2007 to now trading in a range of $8.00 to $12.00. Its market before the effects of any secondary offering was $947 million after Tuesday’s drop. SGEN is also a stock with a high short interest: in mid-July it had over 5.5 million shares in the short interest, about 13.9 days worth of average trading volume.
This is still very much a research and development stage company. Analysts are only looking for about $38 million in revenues for 2009 and about $54 million in revenues in 2010. Until its products are closer to commercialization, losses are expected well beyond this year and next.
JON C. OGG
Diabetes Drug War Heats Up (NVO, AMLN, LLY, MNKD, PFE, SPEX, VVUS, GNBT, BMY, AZN, ARNA, GERN, STEM, OREX, HDIX, PODD)
Over the last couple of weeks, there has been quite a bit of new data in the drug war in the fight against diabetes. New studies have been updated, earnings projections have been made, FDA dates have been telegraphed and more. While these are still far short of ultimate cures, the war against diabetes may have many new or improved treatments out sooner rather than later. We originally discussed one or two of the key upcoming treatments pending for the eight major diseases and conditions as “the next $170 billion opportunity” and this is a much deeper dig into that broad initiation. We have included many of the recent developments in the potential treatments for obesity as well, considering that Type II diabetes and obesity are frequently conditions tied directly to each other.
According to the Journal of Health Affairs, the figure on obesity for Americans is a whopping $147 billion per year in total medical costs. This comes to 10% of all healthcare spending. The figure from the U.S. Centers for Disease Control was some $116 billion spent domestically on treating diabetes in 2007. As this is a lengthy bit, we have not included some of the other treatments that have been in use or that were recently flagged because of reports of higher chances of cancer rates associated by the long-term use of these.
FDA & IMMEDIATE ACTION
There is a new diabetes hopeful that is supposed to be coming sooner rather than later. Novo Nordisk (NYSE: NVO) reported a 21% gain in earnings in the last week and said that it expects the FDA to make a decision on its next-generation diabetes drug Victoza (liraglutide) in a matter of weeks. The company’s CFO and CEO both indicated that the Danish company does expects a positive response from the FDA and we heard a August to September expectation. Novo Nordisk has already launched Victoza in England, Germany and Denmark last month and expects to release it in other European Union countries throughout 2009 and into 2010. The benefit is that this one doesn’t risk pushing blood glucose levels to counts which are dangerously low and it also helps users lose weight. Novo Nordisk said it has priced Victoza competitively with Byetta from Amylin Pharmaceutical, Inc. (NASDAQ: AMLN) and Eli Lilly (NYSE: LLY). After the earnings and after shares were still close to 52-week highs, we saw analyst downgrades on Friday for Novo Nordisk by both UBS and by J.P. Morgan.
The drug still expected the next big new release with Blockbuster potential is an inhalable insulin from MannKind Corp. (NASDAQ: MNKD). Afresa is to be its name. Despite past woes of inhalable insulin, MannKind shares were hitting 52-week highs in June and its shares are still up 20% from three months ago. A late-stage study showed that Afresa’s performance was similar to injectable insulin. The company recently sold a 7.4 million shares secondary offering to raise cash for this launch, and its CEO took 1 million shares of the offering. The thought was that MannKind would secure a partner for marketing and development, but the recent stock offering gives it more internal options ahead of what is believed to be a Spring-2010 FDA approval action. Pfizer Inc (NYSE: PFE) has been thought of as a partner as it moved Exubera inhaled-insulin patients to MannKind’s experimental product. The two companies had been partners until Pfizer pulled Exubera from the market in 2007.
There is also a huge opportunity for the once per week dosing. We are not yet convinced that this can be a universal next generation treatment, however this might be fine for many of the lower grade cases if you can refer to any diabetes cases as lower grade. Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN), Eli Lilly (NYSE: LLY) and Alkermes Inc. (NASDAQ: ALKS) have had a recent New Drug Application accepted by the FDA for review. Exenatide is an investigational sustained release medication for type 2 diabetes that would be injected once per week and is the active ingredient in BYETTA. We are not alone in this thought, but Amylin is a company which many have thought would be acquired for years now when considering the link of diabetes and obesity.
VIVUS, Inc. (NASDAQ: VVUS) has a substantial shot here with Qnexa, its Type 2 diabetes treatment through weight loss assistance. The stock recently came off on worries of its risk factor language that may have to be disclosed, but it showed a 9.4% weight loss or over 20 pounds observed in patients. The DM-230 study was a 56-week study assessing the impact of Qnexa on glycemic management in 130 obese patients. The 10-site study was comprised of 90 females and 40 males with an average age of 50 who had Type 2 diabetes, and a majority of the patients had been diagnosed with diabetes for more the five years and were taking two or more oral diabetes medications. In the phase II and phase III clinical trials, Qnexa demonstrated glycemic control, significant weight loss, and an improvement in cardiovascular risk factors. VIVUS is also presenting data at a brokerage firm conference this coming Thursday. The company’s market cap is still just under $500 million and its most recent balance sheet had north of $144 million in cash and equivalents with very little long term debt.
Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN) have recently received FDA approval for Onglyza as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes. This Onglyza is a once-daily dipeptidyl peptidase-4 (DPP4) inhibitor that can be used in combination with commonly prescribed anti-diabetic medications or on a standalone basis as a monotherapy to significantly reduce glycosylated hemoglobin levels.
MORE OBESITY CANDIDATES COMING
Several biotechnology companies are working on the next wave of obesity candidates, as noted above in VIVUS’s Qnexa. Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) has Lorcaserin, Orexigen Therapeutics, Inc. (NASDAQ: OREX) has Contrave, and Amylin Pharmaceuticals Inc. (NASDAQ: AMLN) has pramlintide. Orexigen’s Contrave has completed phase III trials and our time line for when the company will file for approval is in early 2010. The company is presenting data this Thursday at the Canaccord Adams Global Growth Conference. VIVUS’s Qnexa is currently in two phase III programs with a new drug application expected around the middle of 2010. Amylin’s pramlintide and metreleptin are currently in phase IIb.
We have the expectation that Arena will have a first-mover advantage with an NDA planned before the end of 2009. Certainly, any delays or advances could change the status of the front-runner category leadership. Arena’s near-term catalyst is the release of the phase III BLOSSOM data out in September 2009, which will be used as part of a supplemental NDA in late 2009 or into 2010. This still leaves a year or more for final FDA action from now. Arena shares surged in late-July after reporting that its obesity results met the three endpoints.
STEM CELLS
Stem Cell therapy offers a huge promise, but so far that looks to be years out and the promise is actually more of a hope for the time being. Geron Corporation (NASDAQ: GERN) is in the research stage of using stem cells in evaluation of Type 1 diabetes. The exact level of this study is not as far as along as some of its cancer and spinal studies, but this is one of the few stem cell companies that have dedicated part of their mission to diabetes. StemCells Inc. (NASDAQ: STEM) also has a Pancreatic Program concentrating its efforts on Type-I diabetes. Its goals are to identify, isolate, and culture pancreatic stem and progenitor cells, and to test their therapeutic potential.
While we at BioHealthInvestor would love to hold hope and promise for stem cells, we would not be hoping for stem cell treatments any time in the near future. While some positive notions have been noted in the stem cell sector, the National Institute of Health noted, “Over the past several years, doctors have attempted to cure diabetes by injecting patients with pancreatic islet cells—the cells of the pancreas that secrete insulin and other hormones. However, the requirement for steroid immunosuppressant therapy to prevent rejection of the cells increases the metabolic demand on insulin-producing cells and eventually they may exhaust their capacity to produce insulin. The deleterious effect of steroids is greater for islet cell transplants than for whole-organ transplants. As a result, less than 8 percent of islet cell transplants performed before last year had been successful.”
Fighting Swine Flu The Wal-Mart Way (WMT, AZN, GSK, NOVN, SNY)
You can just see the TV advertisements now… Wal-Mart and Uncle Sam are “rolling back” swine flu.
The retailer is in talks with federal officials about possibly putting vaccination sites in its stores this fall. It’s a smart idea that should boost Wal-Mart Stores Inc’s (NYSE: WMT) foot traffic, and give the federal government a fighting chance to reach aggressive its inoculation goals, especially in children.
The government has failed rather miserably in coaxing parents to get vaccinated against other illnesses. Only about 15 percent of kids get all their recommended shots, one of the main reasons why worries that there will not be enough swine flu vaccine to go around this fall likely are overblown.
It’s one of the reasons why companies not named AstraZeneca plc (NYSE: AZN), GlaxoSmithKline plc (NYSE: GSK), Novartis AG (Nasdaq: NOVN), Sanofi-Aventis SA (NYSE: SNY) and Australia’s CSL Ltd. might not see any business from providing swine flu vaccines this season.
About 140 million people shop at Wal-Mart each week. A deal with the retailer could certainly help the government reach its goal of getting about 159 million people the vaccination this fall, especially young children that CDC officials also want to see get a regular flu shot.
There’s been no talk of pricing yet, but count on Wal-Mart to make price a fixture of any outreach. Don’t be surprised if there are 2-for-1 specials for families, and special deals for kids that also get a regular flu shot. — Mike Tarsala
