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Tekmira Pharmaceuticals Corporation: Bulls Vs. Bears

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Much of Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR)’s valuation of late has been tied up with the potential of the Ebola virus treatment it has been working on. That’s the wrong way to value the company, according to analysts at Glaucus Research Group, but analysts at other firms continue to be bullish on Tekmira based on that Ebola treatment.

The bears on Tekmira Pharmaceuticals

In their latest report, self-described short seller Glaucus Research Group said shares of Tekmira Pharmaceuticals are “hugely overvalued” and that the company’s stock price is “poised to collapse.” The firm points out that in July, the U.S. Food and Drug Administration put a hold on the company’s Ebola Phase I trial because of concerns about safety.

The report claims that “despite limited use it appears that the drug is unpopular among treating physicians,” although it doesn’t provide any details on where the firm got what appears to be anecdotal evidence. The report’s author states: “To our knowledge, TKM Ebola was only administered after supplies of a competitive treatment, ZMapp, where exhausted.”

So far, the firm states that it appears as if only two patients have been treated using Tekmira’s Ebola treatment. It adds that a U.S. hospital that first administered the Tekmira drug chose a drug made by a competitor to treat the next Ebola patient and suggests that doctors are concerned that the company’s treatment is “toxic and unsafe.”

Further, the firm states that companies with licensing, collaboration or partnership deals with Tekmira “appear unlikely to renew such arrangements and seem uninterested in pursuing further commercial relationships.” In addition, Glaucus suggests that the IV method of treatment delivery is impractical in most of the countries where the Ebola virus is centered and that Tekmira’s technology is unproven because the FDA has never approved any RNAi-based treatments for anything health problem.

Glaucus has a Strong Sell rating and price target of between $7 and $10 per share on Tekmira.

The bulls on Tekmira Pharmaceuticals

Analysts at Clarus Securities are far more positive on Tekmira and the potential of its Ebola virus treatment. In his report dated Nov. 7, 2014, analyst David Novak provided analysis of the drug maker’s latest earnings report, maintaining their Buy rating and $40 per share price target in the wake of those results.

Tekmira Pharmaceuticals reported second quarter revenue of $4.4 million, compared to Novak’s estimate of $3.3 million and the consensus estimate of $3.9 million. Net losses were 39 cents per share, slightly better than his estimate of 41 cents per share in net losses bot worse than the consensus estimate of 32 cents per share in net losses.

One of the reasons the Clarus analyst is bullish on Tekmira is because the U.S. Dept. of Defense decided to support manufacturing for the Guinea variant of the company’s Ebola treatment. The support covers 500 treatment courses for $7 million. The product is expected to be available next month. Novak said he is “encouraged” by the DoD’s support because the agency “has likely been privy to all data emanating from compassionate use.”

The analyst expects a status report on Tekmira’s HBV IND treatment to be filed by the end of the year. He remains “optimistic” that no pretreatment with steroids will be requirement with the drug.

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