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Avian Flu Misinformation


Be a better news consumer. A chicken getting the sniffles is not the end of the world.

It's unfortunate that Recombinomic's press release is getting as much play as it is. Biotech people I know are laughing at it. It reflects a theory that works fine in the lab when viruses are manipulated specifically for recombination, but doesn't happen (or at least not significantly) in the real world. When a virus enters a cell, it typically co-opts the cellular machinery to make sure other viruses don't crash the party.
The Lowy Institute (not Lowry as has been reported elsewhere) bases its worst-case scenario on something worse than the 1918-19 Spanish Flu outbreak. Since 1918 we have, of course, progressed considerably as a planet. Case in point is the SARS "epidemic" which was effectively detected, controlled, and stopped in its tracks well-before it got to the pandemic level. Our monitoring procedures have improved considerably even since the SARS outbreak. Interestingly, the Lowy Institue writers base their economic predictions on SARS work, but don't include the SARS infection model in their guesstimates.

It should be clear to anyone who actually read Lowy's publication that this is a financial exploration. The "ultra-risk" level of 142 million deaths was spun out of thin air as part of an exercise in predicting economic harm. This paper does not predict 142M deaths, it only uses 142M deaths as a data point to make other predictions. In fact, this paper has nothing to do with forecasting deaths from a H5N1outbreak. All it does is forecast economic harm based upon three ancient history scenarios and a completely made-up "ultra" death number. Big difference, and perfectly obvious to anyone who actually read the report before writing about it.
What would truly be useful is if people who actually didn't know what they were talking about when it comes to avian influenza and a potential H5N1 pandemic would simply keep quiet. The amount of resources on the personal, media, and governmental level flat out wasted is simply staggering. We held a community meeting on Avian flu/H5N1 influenza last month and the amount of misinformation was frightening. People have already pulled their kids out of school just because the media is intent on reporting every time a chicken gets the sniffles.

99% of the "bird flu" media stories are exactly that: Some bird has tested positive for the flu. This is not a new phenomenon. The only thing new is the reach of testing and the quantity of misinformed reporting. As of yesterday, 172 people have contracted lab-confirmed H5N1 influenza, 92 of whom died. That's from 2003 to the present.
As I've written previously, there is a great deal of misinformation about H5N1 influenza.
Viruses are organisms that live to multiply rapidly. They don't have sex, however. They hijack a cell's machinery and force the cell to create clones of the original virus. Variations of a virus in the wild come from genetic mistakes -- something happens in the cloning process to create a virus that does a better job of surviving in its environment, so it becomes the dominant strain.
Recombination is closer to "mating" because it involves swapping of genetic material, and it happens rarely, if at all, in the wild. Recombination is a popular scientific worry, and one reason why viral-based biotech drugs get so much scrutiny at the FDA. In a lab, a pair of viruses can be forced to occupy the same cell. This increases the chance (from non-existant to something slightly larger than that) that the two viruses swap genetic material to produce a third virus.
Remember, for a bird flu virus to cause a real problem it has to:
  1. Mutate into something a human could catch
  2. Be lucky enough to invade a human via unsafe handling methods
  3. Mutate again into something that is very contagious to humans
  4. Escape an increasingly sophisticated global influenza monitoring network long enough to build a head of steam
  5. Be resistant to the array of treatments we have to treat influenza and its symptoms
Is there money to be made in pandemic influenza? Sure. I haven't seen anyone yet I'd put my money on, but that doesn't mean there isn't money to be made in a trade here and there. But the lesson that will be learned from this little mini-bubble is that only those companies who can transition their technology to making a better regular influenza vaccine will survive.
Avoid companies who only issue press releases about isolating some variant of the virus. Nobody knows what the virus that satisfies all five steps above will look like. N-O-B-O-D-Y. If you must play in this sector, focus on companies who are developing platforms to rapidly produce influenza vaccines in a matter of weeks instead of months. That technology will be useful to the large vaccine manufacturers. In the slim, slim chance a pandemic occurs, they'll also be the only ones positioned to benefit from it.
Above all, when some VC creates a fund specifically for something like this you need to rethink your exposure.

No positions in stocks mentioned.

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