Market Overview

Tekmira Pharmaceuticals Corporation: Shares Soar On Ebola Drug Trials

  • Spotlight on TKM-Ebola.
  • More cases expected in West Africa.
  • Companies researching on a cure for Ebola have seen shares soar.

The world media has been awash with the deadly Ebola virus that is wreaking havoc in West Africa. Long confined to a small area in parts of the Congo, over the last five months we have seen an unprecedented outbreak of the disease that claims up to 70 percent of all its victims. Due to the isolated nature and relatively low mortality of Ebola since it was discovered fifty years ago, little research had been dedicated to finding a cure or vaccine. The recent outbreak has changed all that, with efforts being scaled up to find a treatment. Tekmira Pharmaceuticals Corporation (NASDAQ: TKMR) is one of the companies on the frontline of helping stem the spread of Ebola, and it has been getting a lot of attention from investors and regulators.

TKM-Ebola: A Drug With Promise

So far the spotlight is on Tekmira Pharmaceuticals Corporation's drug, TKM-Ebola. In July, the Food and Drug Administration gave the green light for the company to launch early stage trials of the drug. Despite all the enthusiasm, this could take a great deal of time. Based on the most reliable information available, the company needs time to produce sufficient quantities for the trial. Results of the trial (to consist of 40 patients and likely to take place at the epicenter of the disease, in West Africa) could be available towards the end of 2015. Notwithstanding, it's important to remember that untested samples of TKM-Ebola were administered to Dr. Sacra, an American doctor who contracted the disease while treating patients in the West. Due to a number of interventions that did not only consist of the drug, it not clear whether Tekmira's Pharmaceuticals Corporation's drug was responsible for his recovery.

What the Numbers Say

Shares of Tekmira Pharmaceuticals Corporation are up 280 percent since the beginning of this year. To a number of skeptics, Tekmira's rally is a train that will soon run out of steam as investors have bought shares in the company without a clear understanding of how the biotech industry works. They are quick to point out that it could be two to five years before we actually have a commercial drug on the market and Tekmira is not expected to post any profits this year or the next. We also don't know of any large orders so far for TKM-Ebola. The diagnosis of a Liberian man of Ebola on U.S. soil, the first of its kind, could be a game changer. Investors are estimating an order of $150 million to build stock piles of the drug, should trials show promise.

Headed for A Pop?

With the rate shares of Tekmira Pharmaceuticals Corporation have risen over the last few months, this stock could pop at any time resulting in significant losses for investors. Uncertainty and fear surrounding the Ebola virus are major drivers of this company's stock, but reality may soon set in. Besides there are also other companies that are fighting for a piece of this lucrative market such as NewLink Genetics Corp (NASDAQ: NLNK), BioCryst Pharmaceuticals, Inc. (NASDAQ: BCRX), GlaxoSmithKline (NYSE: GSK) among others. Tekmira Pharmaceuticals Corporation is good for holding on a short-term basis, and milking the profits generated by a sensational media.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.


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