Tekmira's Shot At Ebola And Beyond
West Africa’s ebola epidemic has now killed more than 1,110 people, making it the most deadly outbreak of the disease yet. The World Health Organization said the flare up is much worse than initially expected and the FDA noted swindlers are capitalizing on fear with fake treatments.
The outbreak is labeled Category 6 on the Infectious Disease Impact Scale, meaning it can have maximum social disruption.
Amidst destruction, Tekmira ($TKMR) has been thrown into the spotlight. Shares of the previously unknown pharmaceutical company are up 106 percent over the past month as investors speculate on its possibility as an ebola treatment.
Tekmira, which specializes in delivery systems, is responding to ebola with an antiviral RNAi therapeutic. The drug was placed on clinical hold in July while the FDA demanded more information on safety of trial participants. However, just a month later, the possible cure has been approved for use in infected peoples.
The treatment is currently being developed with a $140 million grant from the U.S. Department of Defense. As demand for a cure intensifies, Tekmira could see additional funds and support from government agencies flow in.
Although Wall Street attention has stemmed from ebola speculation, analysts think potential ebola monetization does not justify the massive swings in price (52-week low and high of $5.08 and $31.48). The doubling in price over the last month may in fact be driven by value in the company’s pipeline, which was uncovered by a mass audience as ebola talk heightened.
(pipeline from company website)
Along with ebola, Tekmira is developing solutions for other high profile diseases, including hepatitis B and gastrointestinal tumors.
“With a strong balance sheet and multiple programs in clinical development, we look forward to sharing our progress with you in the months ahead,” said CEO Mark Murray, highlighting six separate drug developments in last week’s conference call.
Equity research has echoed this idea. Recent analyst commentary has focused on the large pipeline, driving a $25.25 average price target (implies 26.2 percent upside).
TMK-HBV, the company’s hepatitis B solution, for example, uses a similar delivery system as the ebola drug, RNAi. If Tekmira ups resources spent on developing an ebola treatment, commonalities in delivery systems may boost hepatitis efforts.
Showing the importance of Tekmira’s non-ebola pipeline, a Leerink research report highlighting other drugs sent shares 11 percent higher Monday.
