The novel Wuhan coronavirus outbreak intensifies Thursday with an increasing number of infected individuals, and as expected during a global pandemic scare, biotech firms are the only ones who are happy. While the equity markets, especially in China and the rest of the Asian market, has seen a sharp fall after Chinese authorities confirmed that the then-unknown strain of coronavirus had killed more than 17 people, biotech firms have seen a spike in stock prices.
With the speculation that biotech and pharmaceutical companies like Nanoviricides (NYSEAMERICAN: NNVC) can be the first to develop the cure for their novel coronavirus, which originated in the Wuhan province in China, stocks rose up to beyond 150% starting the trading session on Tuesday.
While analysts believe that cure wars would ensue when the outbreak further intensifies, pushing biotech firms’ stock prices even higher, many of them are reluctant that a firm as small and as broke as Nanoviricides would be the first one to develop a cure.
According to the most recent financial report from the company, Nanoviricides projected only $875 million in cash and equivalents on its balance sheet. Out of this, $1.4 billion went to research and development, while $505 million went to general and administrative costs in three-months time. For analysts, this is an indication that the company is running out of cash faster than it could issue new shares, making it a bad investment for anyone to buy in the coronavirus hype.
The virus, which is a similar kind to the one that caused SARS and MERS-COV, has since taken the lives of dozens of people across China and is spreading faster. The World Health Organization is set to meet to discuss whether or not to declare the Wuhan coronavirus outbreak as a global emergency or not.