We wrap up an interesting week with thanks to all the veterans for their dedication and service. No where better to live than here in the US.

And an interesting week it has been. While earnings continue to be reported, we also had medical conferences that wrapped-up this week (AASLD, ACR), and conferences that will begin tomorrow (EORTC, AHA).

In between, we had break-ups, with $AMLN buying back rights from $LLY for exenatide and its successors for $1.6B, and hook-ups, an East-West alliance between Lundbeck and Otsuka in CNS. There were more job cuts with up to 1,500 now looking for new opportunities (involuntarily, of course), partially as a result of $TEVA’s acquisition of $CEPH, but no sign of increased hiring. We saw late-stage clinical trial failures, some surprising, such as a failed Phase 3 trial from $TRGT (they had good Phase 2 data, but from India….just saying…), and not so surprising Phase 3 failures, where $NABI showed convincingly that their vaccine for smoking cessation does not work (again). And today, Friday, Veterans’ Day, we had FDA regulatory news, whereby $ALIM/$PSDV Iluvien NDA’s received a CRL. Whew.

I was not long or short  in any of these names, nor was I interested in trying to trade around these events, though I am sure there were traders who had a fun time this week.

So, here we are, looking for opportunities currently under the radar. Perhaps, I just need a shot in the arm to stay focused and persistent.

Half of the family is now vaccinated for this year’s three flu strains (same as last year), and the rest will get their shots over the next couple of days.

The vaccines approved by the FDA are made in chicken eggs. But it got me thinking, what happened to the flu vaccines that were going to be made from newer technologies? Just a few years ago everyone was looking at alternatives to chicken egg-based manufacturing. Weren’t we concerned that if a pandemic flu hit, we could not be able to make vaccines fast enough or vaccines at all?

$NVS has made significant investments into vaccine production using mammalian cells, but they haven’t been approved for vaccine production in the US. $SNY took a different approach and went with scale to produce influenza vaccines in the US. Anyone know where they stand today on cell-based flu vaccines? Thought they gave back rights to cell-based influenza vaccines to Crucell (now a part of $JNJ), sometime last year.

But where are the little guys? They are generally great places to look for new and innovative technologies.

It’s probably still a bit early, but Novavax ($NVAX) is intriguing. Setting aside their slow progress over the past several years, if one looks simply at their virus-like particle (VLP) technology as a vaccine platform, it seems feasible.

To understand their platform, you should probably check out their website. Here is the 101 – and as always, please use at your own risk. Simply put, they engineer a virus (Baculovirus, or BAC) to produce the proteins used in our typical flu vaccine in insect cells (in contrast to $NVS’ use of mammalian cells). No big deal right?

They hope to make an impact in two ways. First, the vaccine we use today consists (mostly) of a single protein (hemagglutinin, HA) which has been purified and inactivated (denatured), so the body sees globs and blobs of this protein. In nature, the influenza virus exists as an ordered 3-D structure with multiple surface proteins (HA; neuroamidinase, NA) that poke through on the surface and with structural proteins (such as maxtrix, M1) hanging out closer to the base – all of  which can all be antigenic targets. The VLP is designed to look like the native influenza virus in 3-D structure, so that the body sees a “safe, non-flu causing look-alike” to build an immunity.

The second impact is production. Using insect cells and a disposable manufacturing process, they have the advantage of time. The claim is that they can make vaccine in 12 weeks versus the 20-24 weeks needed using chicken eggs, a significant time savings. If there is a crisis, or manufacturing hiccup, that 1-2 month advantage could be invaluable.

Downsides.  Of course, there are  – nothing is perfect. Thus far, it doesn’t look like we get significantly better serological response with the VLP, nor can we use a lower dose of product. From an efficacy standpoint, why bother? There are no apparent clinical advantages. From a regulatory standpoint, it is an entirely new process, so the bar for safety, especially for prophylactic vaccines and in particular, those used in children, will be significant.  On the other hand, they are looking to make a vaccines with four strains, so we could get more bang for the buck.

If all goes well, we won’t expect to see this new vaccine marketed until 2014-2015. There will be lots of time before we get to Phase III data, FDA approval, and the market…unless of course, we get another pandemic flu scare, and then all cards are off the table.  Luckily for the company, BARDA is paying for the vast majority of this program, so the overall costs to $NVAX is minimal. They can put their resources towards the development of their other programs, RSV and Foot and Mouth Disease (they do have a grant from the Department of Homeland Security, so most of their burn should be on RSV).

At last check, they closed at $1.50/share today. With roughly 115 MM shares outstanding, their market capitalization is c. $172 MM. They reported $19.6 MM cash 3Q11 and guided to a 1-yr runway. They will need to raise cash in the near future – we will need to keep an eye on RSV data and make sure that they stay on track with the influenza program. Being a thrift guy, I’d like to see this a bit cheaper before I buy shares for the long haul.

No position in $NVAX.