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Global public health emergencies often bring a wave of uncertainty, and the recent surge of Mpox is no exception. As the virus spreads beyond its traditional stronghold in Central Africa, the stock market offers some insights into investor sentiment, particularly through the performance of Denmark's Bavarian Nordic. The company, valued at $3.2 billion, produces the Jynneos vaccine, which is effective against Mpox. Recent movements in its share price suggest that while the outbreak is currently seen as contained, there are concerns that the situation could escalate.

Mpox, first identified in 1958, has resurfaced this year with alarming statistics. Since the start of 2023, there have been 27,000 cases and more than 1,100 deaths in the Democratic Republic of the Congo (DRC). This uptick in cases, coupled with the detection of a new strain in Sweden, prompted the World Health Organization (WHO) to declare Mpox a global public health emergency. The virus's spread beyond Africa is becoming a significant concern, with Pakistan recently confirming its first case in a patient returning from the Gulf region.

Bavarian Nordic's stock performance offers a window into how investors are interpreting these developments. The company's share price has increased by approximately $1 billion in the past week alone, reflecting heightened expectations for vaccine demand. This surge in value suggests that investors are bracing for a potential worsening of the outbreak.

Using a forward price-earnings multiple of 23, the market's valuation of Bavarian Nordic implies an additional $46 million in annual earnings, or about $340 million in revenue. This figure is based on the company's 13% net margin, projected by analysts for the coming year. With the U.S. government purchasing Jynneos at around $70 per dose, the recent increase in Bavarian Nordic's market value translates to the expectation of selling approximately 5 million additional doses. While this is a significant number, it pales in comparison to the global population of at-risk individuals, including children and those with compromised immune systems.

Bavarian Nordic has indicated its capacity to produce up to 10 million doses by the end of 2025, a figure that could rise if governments decide to stockpile vaccines. This strategy mirrors the U.S. approach to smallpox vaccines, where stockpiling is seen as a necessary precaution against potential outbreaks.

However, the situation is fluid, and several factors could exacerbate the crisis. Mpox is known to mutate, and the recent rise in global travel could facilitate the spread of more virulent strains. McKinsey projects that global travel spending will reach $8.6 trillion in 2024, marking a full recovery from the pandemic-induced slump of 2020. Should Mpox mutations lead to more severe outbreaks, travel restrictions could be reimposed, challenging the current market calm and potentially driving demand for vaccines even higher.

Adding to the complexity, Bavarian Nordic recently submitted data to the European Union's drug regulator, seeking approval to extend the use of its Mpox and smallpox vaccine to adolescents aged 12 to 17. The company is also planning a clinical trial to assess the vaccine's safety in children aged 2 to 12, with the trial set to begin in the DRC and Uganda later this year. This trial, partially funded by the Coalition for Epidemic Preparedness Innovations, could further expand the vaccine's use, particularly as the outbreak continues to affect younger populations disproportionately.

The resurgence of Mpox, coupled with the ongoing spread outside Africa, underscores the need for vigilance. Bavarian Nordic's rising stock price reflects a growing recognition that the outbreak could worsen, requiring a more robust global response. As the situation evolves, investors and public health officials alike will need to remain alert to new developments that could dramatically shift the trajectory of this public health emergency.