RNAi-based therapies are contingent on an effective delivery mechanism in order to ensure payload receipt at the proper targets. Tekmira Pharmaceuticals (TKMR) develops the most clinically tested of these existing platforms - Lipid nanoparticles (LNP), sometimes referred to as SNALPs (Stable nucleic acid-lipid particles). But the small company simply hasn't garnered the same level of attention in 2013 that larger RNAi players like the $4B Alnylam Pharmaceuticals (NASDAQ:ALNY) have. Investors that are acquainted with the RNAi space will be well aware of the lengthy, two-year arbitration between Tekmira and partner Alnylam. A settlement was reached in November of 2012 granting Tekmira sole ownership of the LNP patent estate and a cash settlement of $65M. Nevertheless, Alnylam is still reliant, in-part, on Tekmira's LNP delivery tech, which is used in the larger company's in-house assets ALN-TTR02, ALN-VSP and ALN-PCS. While Tekmira has a modest economic stake in the success of these therapies, the fact that Tekmira exclusively owns the LNP platform was a major win for the small company and is critical to the long-term investment thesis.
For those unacquainted, you can catch up on Tekmira in our previous public articles, here and here. Readers who took a position when PropThink first suggested going long TKMR in April of this year have seen returns of more than 40%. Regardless, we continue to believe that TKMR is an attractive opportunity given its comparatively low valuation - market capitalization of $100 million and enterprise value of ~$60M - strong balance sheet, and growing pipeline. The company's lead candidate, TKM-PLK1 is being tested in gastrointestinal cancers, and TKM-Ebola will enter a Phase I safety study early next year. Perhaps generating the most interest as the company wraps up 2013 is the expectation that Tekmira will reveal a new drug candidate for progression into human testing, and the company may see the first royalties on Spectrum Pharmaceuticals' (NASDAQ:SPPI) treatment for Ph- acute lymphoblastic leukemia, Marqibo. With the market still pricing in low expectations for TKMR and near-term newsflow out of the company low-risk, the stock remains an attractive holding.
Last week Tekmira presented new pre-clinical data on the company's experimental treatment for Marburg Hemorrhagic Fever, TKM-Marburg. In four small studies in non-human primates, TKM-Marburg, which has flown largely under the radar, provided complete protection from the Marburg Angola virus even when a drug regimen was not initiated until 24 hours after virus exposure. TKM-Ebola, Tekmira's lead infectious disease program, is funded under a $140M contract with the U.S. government and will enter Phase I testing in 2014. Recall that Sarepta Therapeutics (NASDAQ:SRPT) develops AVI-7288 for the treatment of Marburg and operates the program under a similar contract with the U.S. DoD. TKM-Ebola and -Marburg fall under the umbrella of the FDA's Animal Rule, which could allow for approval based on efficacy in non-human primates and demonstrable safety in humans. The Marburg data, while in a small population, continue the protection trend seen in earlier -Ebola data and suggest that these filoviruses are an attractive target for Tekmira's RNAi therapeutics.
In consideration of growing interest in the realm of RNAi therapeutics, PropThink.com is orchestrating an exclusive conference call and interview with Tekmira Chief Executive Officer Dr. Mark Murray for the afternoon of Thursday, October 3. Facilitating access to management for an oft-under-represented community - retail investors - is one of our goals at PropThink, thus this upcoming conference call will include an open Q&A with Dr. Murray. Interested investors are invited to participate in the event free of cost and can read more about the call - which is scheduled for 3:00 PM ET on October 3rd - and sign up at PropThink.com/TekmiraCall, here.
Dr. Murray joined the company in May of 2008 when Tekmira merged with Protiva, where he had served as President, CEO, and founder since its inception in 2000. Dr. Murray held senior management positions at ZymoGenetics and Xcyte Therapies and has worked on three programs that resulted in FDA approved drugs, in addition to raising more than $30M in venture capital during his career. Dr. Murray obtained his Ph.D. in Biochemistry from the University of Oregon Health Sciences University and was a Damon Runyon-Walter Winchell post-doctoral research fellow for three years at the Massachusetts Institute of Technology.
On the PropThink call, Dr. Murray will offer his insight on LNP, the RNAi landscape, and Tekmira specifically in an interview format before the call is turned over to participants for an open Q&A. Details and free registration can be found at Propthink.com/TekmiraCall, or by clicking here.
Disclosure: I am long TKMR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. PropThink is a team of editors, analysts, and writers. This article was written by Jake King. We did not receive compensation for this article, and we have no business relationship with any company whose stock is mentioned in this article. Use of PropThink’s research is at your own risk. You should do your own research and due diligence before making any investment decision with respect to securities covered herein. You should assume that as of the publication date of any report or letter, PropThink, LLC and persons or entities with whom it has relationships (collectively referred to as "PropThink") has a position in all stocks (and/or options of the stock) covered herein that is consistent with the position set forth in our research report. Following publication of any report or letter, PropThink intends to continue transacting in the securities covered herein, and we may be long, short, or neutral at any time hereafter regardless of our initial recommendation. To the best of our knowledge and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable, and not from company insiders or persons who have a relationship with company insiders. Our full disclaimer is available at www.propthink.com/disclaimer.