As the roller coaster ride that is the Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR) stock continues, the Royal Bank of Canada (NYSE:RY) (TSE:RY) is out with a new report that seems to suggest investors are missing the point.

Tekmira Pharmaceuticals Corporation Stock

Tekmira’s Hepatitis B cure is the real value

The RBC research report shouts the headline that while the Ebola scare, and Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR)’s cure for the health epidemic, is in the headlines, it is the firm’s Hepatitis B cure that is the real value.

The report says that even given the near 80 percent rise then subsequent retracement, Tekmira remains undervalued due to the upside potential of the firm’s Hepatitis treatment, TKM-HBV.  The Tekmira bull case remains intact as the HBV clinical data is anticipated to be released this October with another treatment candidate, likely targeting orphan liver indication, to be announced later in the year, the report said.

Tekmira’s momentum driven by Ebola hype

Considering a short time horizon, RBC recognizes the momentum driven by Ebola hype and how it plays out and calls the situation “quite unpredictable given the sensitive nature of the current situation.” Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR) did note that they are in active discussions with government agencies regarding the Ebola treatment “but given the limited supply on hand, determining who gets the drug could be a difficult question that takes time to answer.”

If the Ebola situation takes a turn for the worse, it would take months to ramp up manufacturing to meet the demand “and the scale, value and profitability of the possible contracts remain unclear at this time.”

One of the more significant risks facing investors would be the failure of Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR)’s HBV drug to generate positive proof of concept data, the report said, noting a $25 price target on the stock.

FDA released restrictions on Tekmira’s Ebola treatments

As previously reported in ValueWalk, Tekmira Pharmaceuticals Corporation stock price closed  at $14.37 on Thursday, then the stock rocketed to $20.70 on Friday and $23.80 on Monday.  The stock rose in price on an FDA announcement that released restrictions on the firm’s Ebola treatments.

Then the company reported slack earnings, and the stock, which traded near the $16 level, has recovered somewhat in early morning trade.  The earnings miss comes as the stock was subject of unusual options trading indicating someone was expecting the stock to move lower, as traders grabbed 10,335 put options on the high-flying stock. For a stock that typically trades just 940 put options in a day, this is near a 1,000 percent increase.

In the company’s recent earnings release, Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR)’s President Dr. Murray was clear where the company’s bread was buttered. “We remain sharply focused on our clinical programs and the key milestones to be reached by year end. Importantly, our Hepatitis B program continues to advance,” Murray said, avoiding the earnings miss and focusing on treatments.