Pharma Focus

A severe influenza outbreak is sweeping across the U.S..What is worse,the strain of flu that is prevalent was not selected for this year's vaccine.This points to a better first quarter for pharmacy chains such as Rite Aid Corporation(RAD),which is led by CEO Mary Sammons and based in Camp Hill,Pennsylvania.Its stock has been trading for less than 3.00 U.S. a share recently.Earnings for Q4 2007 were low on account of warm autumn weather,which kept colds to a minimum,and cautious consumers.Typically,pharmacy chains need illness to drive substantial traffic into their stores.When patients or their families come in to pick up medicine,they buy other kinds of merchandise as well.Rite Aid,for example,carries many cosmetics and has a digital photography center.You can even get photo restoration for 29.99 with a coupon this week.Small electronics such as cell phones,MP3 players and blood pressure monitors are also offered.Rite Aid is striving to be first with new over-the-counter medicines.The hot item now is the allergy drug Zyrtec(cetirizine),which Rite Aid is selling in both branded and private label forms.While the branded form sells for 18.99,the private label goes for 7.99.Soon private label Prilosec(omeprazole) will be sold as well.While Rite Aid shares have been doing poorly,those of biotech drugmaker Genentech(DNA) have been appreciating lately,on news that clinical trial data show that its Avastin is effective in treating advanced breast cancer.The San Francisco Bay Area firm is seeking Food and Drug Administration approval for that usage.It is also testing Avastin in over a hundred additional trials for different applications.As a health care company,Genentech is seen as a defensive holding.Its powerful drugs will be needed regardless of recessionary conditions.In this morning's trading,shares of Rite Aid were up at 2.59,and Genentech shares were up at 73.05.