In this regard, one of my favorite parables is that of the Chinese farmer. He had a prize stallion. One day, the stallion broke free of its pen and ran away. “Such bad luck,” the neighbors exclaimed. “We’ll see,” replied the farmer.

A week later, the stallion returned leading a herd of wild horses. “Such good luck,” the neighbors declared. “Time will tell,” the farmer replied.

Another week went by, and the farmer’s son was attempting to train one of the horses. It threw him and broke his leg. “Such bad luck,” professed the neighbors. The farmer shrugged.

Yet another week later, a warlord came through town and conscripted all of the able-bodied young men, none of whom was ever heard from again. The farmer’s son was spared due to his broken leg.

Was it good luck?

And what does all of this have to do with technology and investing?

I doubt there’s a person alive who hasn’t felt annoyance at coming down with a cold. Colds never come at opportune times. They deplete our energy and have all kinds of annoying side effects.

The good news is that they’re never fatal. On the other hand, almost anyone who’s read the news in the past six months has a vague sense of unease (if not downright fear) about avian flu (AKA H5N1).

I’ve written a special report on the subject (available free of charge to all Emerging Capital Report subscribers — just ask), and it’s every bit as terrible threat as the media portray it.

But now it looks like that annoying old nuisance known as “the common cold” may be coming to our rescue.

The common cold is actually caused by something known in scientific circles as adenovirus. New Scientist reports that U.S. scientists from the University of Pittsburgh and Purdue University have successfully vaccinated mice and chickens with an adenovirus-based DNA vaccine against H5N1 bird flu. The research was published in the Lancet.

Now they’re ready to test the new vaccine on people.

They used genetic engineering to modify the common cold organism so it would carry a protein found on the surface of the avian flu virus. This virus was also modified to prevent it from reproducing, just in case it might acquire some dangerous characteristics.

The new vaccines completely protected mice from the virus, and it also appears to work with chickens, which are considered one of the most troublesome species for spreading the disease.

Two different strains of H5N1 were tested, and the vaccine made from each strain also work against the other — a very encouraging sign.

This gives the researchers confidence that a vaccine can quickly be developed that’s effective not only against today’s strains of bird flu, but also the mutated forms sure to emerge tomorrow. Further, it could allow stockpiling of vaccines, which is crucial to offering a strong immediate response to an outbreak.

One dose provides strong immunity, and additional doses strengthen that immunity. This offers the further advantage that a single starter dose could be offered to large segments of the population as a prophylactic, with additional doses given to those at immediate risk of infection.

Previous attempts at vaccines have focused on using dead H5N1 virus, but have produced only a weak immune response unless given at high doses. The high dosage requirement has meant that the total world vaccine production capability could only take care of 225 million people in six months.

The new inoculant produces a far stronger response at smaller doses, making more comprehensive and effective immunization feasible more quickly. Additionally, unlike flu viruses, the virus for the common cold can be grown in industrial fermenters.

It appears that, once again, technology may have come to humanity’s rescue in our hour of need.

Given that this really does prove to be the preferred method for preventing bird flu infection, it will represent a huge opportunity for those companies vested with responsibility for fermenting vaccine. Hundreds of millions — if not billions — of doses will need to be prepared and stockpiled.

I have my eye on several such companies as investment candidates.

To your profitable future,
Jonathan Kolber
January 3, 2007

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Investing in Virus-Based Medicine was originally featured in the Penny Sleuth.