My attitude when I'm writing to my New World Investor readers is that we are having a conversation -- it's almost like meeting my readers face-to-face, except I can't bump their elbows.

Of course, in the old days I would have said "shake their hands," but with the spread of bird flu and other contagious diseases, more and more people are refusing to shake hands with others. So the World Health Organization, funded in great part by your tax dollars, just came out with the suggestion that people should switch to the "elbow bump" in case of an epidemic.

I am not making this up. People at WHO are studying when they should make the big push to publicize the "elbow bump." If they move too early, they are afraid they'll get laughed at. If they move too late, all of the taxpayers might be dead, and then where would their salaries come from? Pardon my sarcasm, but if WHO thinks the "elbow bump" is an effective response to the bird flu, it explains a lot about the ineffective history of that organization.

But the whole topic got me thinking about viruses and bacteria, mutations, super-viruses and antibiotic-resistant bacteria, and what companies might benefit by producing solutions to fight them. I assumed my short list would have a bunch of very high P/E stocks and development-stage wannabes. What I didn't expect to find was my newest recommendation. Last Tuesday the company reported that its fourth-quarter profit from operations clobbered the 27 cents consensus, coming in at 41 cents a share.

In the interest of full disclosure, I have some fairly radical beliefs in this area. I think all viral and bacterial illnesses are actually a failure of the immune system. That includes cancer, which will be a curable disease when natural and pharmaceutical ways are found to supercharge the immune system. I believed this long before I married a homeopath. So needless to say, our daughter has not been vaccinated for anything yet, but she will receive a tetanus vaccine when she's five or six. None of us get flu shots.

But I also realize that if the immune system can't do its job, and if a disease is life threatening, it is necessary to use every available means to boost the immune system and weaken the disease. And it's true that most people around the world, including those in the U.S., have severely, chronically impaired immune systems from poor diets, lack of exercise, not enough sleep, too much stress and, too often, childhood vaccines. So I have no trouble recommending the stock of a company that steps into the breach with effective antibacterials and antivirals.

After purchasing the U.S. rights to its lead product in November 2004, the company turned profitable in the December 2004 quarter. Sales soared from almost nothing in the September 2004 quarter to a $144 million annual rate a year later. The drug was hardly promoted by the previous rights holder, and sales still grew 10% a year.

I think this company can do much better. This drug is targeted at two antibiotic-resistant lower intestinal tract bacterial strains that are entrenched in hospitals. It is a life-saver in fighting antibiotic-associated colitis Clostridium difficile, and it is also effective against staphylococcal enterocolitis.

The company is also developing two other promising drugs. It is using cash flow from their lead drug to develop a drug licensed from Glaxo SmithKline in August 2003—it completed Phase II trials last November. Preliminary data will be released by the end of March, and it was just accepted by the FDA for Fast Track review.

Another drug being developed is the only drug ever to demonstrate antiviral efficacy against the predominant cause of the common cold. Think about that for a moment. It is licensed to Schering-Plough for development as a nasal spray, and it will be the blockbuster of all blockbusters if it works.

My recommended company should have positive cash flow this year, and on March 1 they redeemed the last portion of their convertible debt, leaving them debt-free. In the December 2004 quarter, when they acquired their lead drug, they did $18.5 million in sales and booked a 20-cent per-share profit. In the first three quarters of 2005, they did $27.2 million, $29.0 million and $35.8 million. And last Tuesday, they announced that they brought in $40.3 million for the fourth quarter.

At 19X 2005 earnings and around 16X my 2006 estimate, this stock is cheap for its long-term growth rate of 20%. The CEO is determined to build a big specialty pharmaceutical company, and it has lots of headroom from its current just-over-small-cap status with a $1.33 billion market cap. And Fidelity bought six million shares (8.9% of the company) in the December quarter—a solid vote of confidence that other funds will pay attention to. I’m targeting a double by this time next year.