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Tiziano Frateschi
Tiziano Frateschi
Articles (2477)  | Author's Website |

Gurus Purchase Tekmira Pharmaceuticals in Q1

June 19, 2015 | About:

About the company

Tekmira Pharmaceuticals Corporation (TKMR) is a biopharmaceutical company dedicated to discovering, developing and commercializing a cure for patients suffering from chronic hepatitis B infection, a disease of the liver caused by hepatitis B virus (HBV). 

The News

The industry-leading therapeutic solutions company is focused on developing a cure for chronic hepatitis B virus infection (HBV). On June 19, it announced that the Phase II clinical trial of TKM-Ebola-Guinea has reached a predefined statistical endpoint and enrollment has been closed, and shows their ability to rapidly and accurately match the evolving genetic sequences of emerging infectious agents, which is the one of the powerful features of RNAi therapeutics. The endpoint indicated that continuing enrollment was not likely to demonstrate an overall therapeutic benefit. Data analysis is ongoing and the full results will be made available as soon as possible.

Now they have substantial experience on the use of TKM-Ebola-Guinea in patients with Ebola. While the trial has reached a statistical endpoint, final conclusions on the efficacy and tolerability of the drug must await full analysis of the data.

The Ebola-Guinea strain is known as "Ebola virus Makona" the virus responsible for the current outbreak in West Africa. The genomic sequence of the Ebola-Guinea strain was determined from several viral isolates and published in the New England Journal of Medicine in October 2014. Tekmira developed a modified RNAi therapeutic based on the company's original TKM-Ebola investigational therapeutic to specifically target Ebola-Guinea. The new product, termed TKM-Ebola-Guinea, is designed to match the genomic sequence exactly with two RNAi triggers.

Other Highlights of Company:

1. Since the closing of the merger between Tekmira and OnCore on March 4, TKMR have integrated their combined teams and strengthened their balance sheet with a $152 million equity financing and now is focused on developing a cure for HBV by combining multiple therapeutic approaches. Uniquely in the industry, Tekmira has eight drug candidates (or assets) under one roof targeting HBV. Due to their merger in Q1 2015, Tekmira incurred $9.3 million in costs.

2. Tekmira's partner, Alnylam (ALNY), announced on April 21 that it had positive 12-month clinical data from the ongoing Phase 2 open-label extension (OLE) study with LNP-enabled patisiran in patients with familial amyloidotic polyneuropathy (FAP). The results demonstrate that multi-dosing using Tekmira's LNP technology has been well-tolerated with treatments out to 17 months.

The company and its shares

When the company announced the closure of its clinical trial, the price of the stock dropped by about 12%, and is now flat if compared to one year back, while it rose by 61% if compared to the last 5 years. When pharmaceutical companies fail or simply stop their projects, the price face a short downward trend, making the company a bargain. The price is now -55.20% from its 52 weeks high and +51.35% from its 52 weeks low, trading with a very cheap forward P/E of 9.97 (Global Biotechnology industry has a median of 23.42).

The company has a financial strength rated 8/10 with many ratios (cash to debt and interest coverage) ranked as “No Debt”, that shows the company doesn’t have problems of cash to cover its debts and its financial costs. All this good news are not confirmed by its profitability and growth that GuruFocus rates 2 out of 10. Returns are negative (ROE of -16.62% and ROA of -12.62%). Annual growth rates over the 5 years are mixed. Revenue dropped by 15% while EBITDA grew by 8.10% and book value by 26.90%.

Gurus are positive about the company. During the last quarter (2015 Q1) Jim Simons (Trades, Portfolio) sold out his shares (a very small stake that was the 0.001% of his portfolio) while PRIMECAP Management (Trades, Portfolio), Steven Cohen (Trades, Portfolio), RS Investment Management (Trades, Portfolio) and John Griffin (Trades, Portfolio) started a new position (and they are all having a loss of about 35%).

About the author:

Tiziano Frateschi
You can read about me on www.theextraincome.info, which gives suggestions on position trading.

Visit Tiziano Frateschi's Website


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