Clarus Securities has initiated coverage of Tekmira Pharmaceuticals (NASDAQ:TKMR; TSX:TKM) with a “buy” rating and price target of $22.50, saying the company is delivering multiple paths to value. The stock closed at $12.73 on Wednesday.
My note: I own positions in CONX and TKM as insurance against a major ebola outbreak outside of western Africa.
Tekmira is focused on RNA interference (RNAi) therapeutics and is a global leader in the field. The company develops a novel class of biological therapeutics and also out-licenses its lipid nanoparticle (LNP) delivery platform.
“Through extensive clinical testing and numerous high-profile partnerships, Tekmira’s SNALP LNP delivery system has become the industry gold standard,” writes analyst David Novak.
The company’s TKM-Ebola drug candidate is currently on clinical hold by the FDA. “We estimate a 75% probability of resumption and associated clinical success, representing a base case of $8 a share derived from our sum-of-the-parts (SOTP) analysis,” he said.
Tekmira’s TKM-PLK1, a highly ubiquitous cancer therapeutic, offers significant mid-term upside, he said. Currently in Phase 1/2 for three oncology indications, “we estimate a base case of $10 a share in SOTP value, assuming a 30% probability of clinical success,” he added.
In addition, Mr. Novak said that “business development opportunities and blockbuster preclinical candidates, such as TKM-HBV, represents enormous upside, free of charge.”
Citing Tekmira’s low-to-medium-risk pipeline candidates, specifically, TKM-Ebola and TKM-PLK1, he said “either one alone, combined with cash, exceeds current market value.” Tekmira had $134-million of cash at the end of the first quarter. |
