It's beginning to sound like something from a Hollywood
The World Health Organization (WHO) says the Ebola virus has been
spreading faster than health workers can control it. The
potential for catastrophe includes the possibility that the
fearsome disease will spread outside West Africa.
The WHO has launched an all-out $100 million spending campaign to
get the outbreak under control, and the World Bank has followed
up with an emergency $200 million pledge. It has been blamed for
killing over 900 people in Guinea, Liberia and Sierra Leone in a
short time, but it might not stop in Africa.
One thing that can help the usually fatal Ebola to cross borders
and spread readily among populations is the fact it can take
anywhere from two to 21 days before symptoms appear. Someone who
contracts the virus in Lagos can board a plane and be in Tokyo or
New York long before they know they are sick.
It was only last month that the Food and Drug Administration put
a clinical hold on one Ebola drug treatment that was already in
trials with human subjects. The treatment, TKM-Ebola, proved
highly effective as a potential Ebola vaccine in treating
The pressure has been mounting on the FDA to push ahead with
immediate human testing of several potential drugs, including a
candidate called TKM-Ebola.
There is ample precedent for an emergency health waiver on
clinical testing. For instance, in 2009, BioCryst
) experimental drug for treating H1N1 swine flu gained emergency
approval as a pandemic took hold. BioCryst shares vaulted over
300% on the news.
The developer of TKM-Ebola is
Tekmira Pharmaceuticals (Nasdaq:
, a Canada-based biopharmaceutical firm that also has a bevy of
other promising potential drugs in its pipeline.
For starters, the company has a $140 million contract from the
U.S. Department of Defense to develop the drug, which shows the
company will make money for bringing TKM-Ebola to fruition even
if it doesn't prove to be a commercial success.
But there is more to the Tekmira story: The company specializes
in the field of gene silencing -- also known as RNA interference,
or RNAi -- that could well have blockbuster potential.
Tekmira also has a partnership with agricultural giant
for use of Tekmira's proprietary lipid nanoparticle delivery
technology and intellectual property. The potential application
for gene silencing in agriculture -- especially where more
disease- or drought-resistant crops might be the result -- could
Tekmira is also teaming up with a variety of pharmaceutical
firms. In May, Tekmira began a Phase I/II clinical trial of
TKM-PLKI, its RNAi candidate for treatment of liver cancer. It
also began a separate Phase I/II trial of the same drug candidate
for gastrointestinal tumors.
In what could be its most promising research, Tekmira is making
progress toward a drug to treat the hepatitis B virus, which
affects more than 350 million people worldwide. Its TKM-HBV
treatment candidate is designed to block the viral protein
emitted by hepatitis B, which could allow patients to generate
their own antibodies to fight the disease.
Tekmira is a development-stage biopharmaceutical firm,
industry-speak for a company with drugs in the pipeline that is
still losing money. In its most recent quarterly filing, the
company said it lost $20 million -- but it had $134 million in
cash on its books and zero debt. Analysts at Zacks estimate that
supply of cash alone could sustain the company into 2016.
Risks to Consider:
Tekmira is focused only on revolutionary RNA interference
drugs, which work by "silencing" disease-causing genes. The
high-stakes gamble of going where other drug companies have not
yet might not be entirely successful. Tekmira depends on the
Department of Defense and larger pharmaceutical partners for most
of its revenue, and expects to rely on third parties to handle
the sales, marketing and distribution of its landmark drug
Action to Take -->
Tekmira is a speculative buy with a potentially remarkable return
based on its novel RNAi approach. The drugs in its pipeline
indicate that holding TKMR for the medium term could yield solid
profits. Zacks has a $25 price target on the stock, which would
give it a $475 million market cap -- in line with similar
biopharmaceutical companies with pipeline drug candidates that
are hoping for big payoffs. That price target represents upside
north of 80% from current levels.
If you're excited by the potential of revolutionary drugs
like these, wait until you see what Andy Obermueller has been
In his latest report, Andy has identified five "game-changing"
trends with the potential to revolutionize the way we live our
lives -- and make early investors a killing. To learn more about
these emerging trends -- and the companies behind them --
follow this link.
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