Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR) (TSE:TKM) stock has rallied more than 70% since the Ebola breakout. Though the company’s Ebola drug TKM-Enola may provide some potential upside, Tekmira’s long-term growth driver remains Hepatitis-B, said RBC Capital Markets analyst Michael J. Yee. At the OTS Conference, the company revealed some interesting pre-clinical data on its Hepatitis-B candidate.

Tekmira Pharmaceuticals Corporation: Hepatitis-B Key Long-Term Driver

Tekmira’s Ebola drug to be tested on West African patients

Though pre-clinical data show promising traits, RBC Capital says the drug is still in an early stage and further clinical data is needed for a clearer picture. RBC Capital Markets has an Outperform rating on Tekmira with $25 price objective. Until the picture about Hepatitis-B gets clearer, Ebola will likely remain center stage and drive the stock price.

Tekmira Future Events

After the recent rally in Tekmira stock, the research firm cautioned that it would take some patience before this level of enthusiasm around TKM-Ebola could be justified. Efficacy of the company’s Ebola drug is yet to be proven in controlled clinical studies in West Africa. The Burnaby, Canada-based company’s Ebola candidate has been used compassionately to treat multiple patients.  TKM-Ebola was recently picked as a potential candidate for controlled clinical studies in West Africa. Yee says it will take at least 4-6 months to get any data from those studies.

By the end of this year, Tekmira is expected to reveal Phase II clinical data about its cancer candidate. The Phase I clinical trials of its TKM-HBV will begin in early 2015. At the OTS Conference, the company showed that its drug is a promising candidate. In its pre-clinical studies, Tekmira used a humanized liver chimeric mouse model.

Tekmira Chimeric Mouse

TKM-HBV shows some promising traits

It showed that the company’s drug can knock down several key Hepatitis-B markers such as HBsAg, DNA and cccDNA. Its triple trigger reduces resistance. However, the humanized liver chimeric mouse model has some limitations that make it difficult to assess its potential on the potency and efficacy, and the duration of effect. Clinical data in 2015-16 should shed light on these parameters.

Tekmira Markers

Hepatitis-B represents a huge market opportunity for Tekmira. There are more than 350 million chronically infected Hepatitis-B patients worldwide. Tekmira shares plunged 12.32% to $19.08 at 1:02 PM EDT on Monday.