Biotech Stock Mailbag: ProQR, Vertex Pharma, Tekmira, Agios

BOSTON (TheStreet) -- After a brief hiatus, the Biotech Stock Mailbag returns.

ProQR Therapeutics (PRQR)  went public just last week at $13 per share. The company's lead product, QR-010, is an RNAi therapeutic for cystic fibrosis still in preclinical testing. ProQR expects to seek permission from U.S. and European regulators to start human studies in the fourth quarter. A phase 1b study in cystic fibrosis patients will start soon after but won't have data available until the fourth quarter of next year.

Cystic fibrosis is caused by mutations in the gene responsible for the production of a protein known as CFTR. The mutations create defective CFTR protein. The lack of functional CFTR protein causes mucus to build up in the airways of the lungs. As a result, cystic fibrosis patients suffer from severe breathing problems and bacterial infections. Fatal respiratory failure is a common outcome.

VRTX Chart

Vertex management has been on the road this fall speaking at investor conferences and meeting with analysts and institutional investors. The outreach is clearly working. I've read the recent analyst notes and spoken with investors who've met with Vertex management in recent weeks. What I hear is Vertex is exuding confidence in the future of its cystic fibrosis business. The Kalydeco/VX-809 data from the "Traffic" and "Transport" studies (treating homozygous F508del patients) will be presented next month at the North American Cystic Fibrosis Conference . When Vertex announced top-line results in June, some investor griped about the clinical relevance of the 3.3% improvement in lung function. Those worries have faded. The 30% reduction in pulmonary exacerbations reported in the studies is huge and will be a highlight of the upcoming cystic fibrosis conference. Based on Vertex comments, investors are getting more bullish on Kalydeco/VX-809 pricing, which could come in above consensus. 


John H. writes, "Now that Tekmira Pharmaceuticals ( TKMR) has been allowed to treat patients infected with Ebola using TKM-Ebola, analysts are saying it's more about the validity of the platform that Tekmira uses. What is this platform they are referring to?"


All of the drugs in Tekmira's pipeline are based on RNAi, a technology which delivers snippets of genetic material into cells in order to turn off or silence specific genes producing disease-causing proteins. Delivery into cells is one of the key obstacles to effective RNAi-based drugs, so Tekmira is developing its own proprietary delivery system. Tekmira believes it can develop effective RNAi drugs at a lower and safer dose than competitors like Arrowhead Research (ARWR) and Alnylam Pharmaceuticals (ALNY) . Whether that's true remains to be seen since Tekmira's pipeline is still early stage. 

I'd say the use of TKM-Ebola to treat Ebola patients helps validate the safety of Tekmira's RNAi platform. We don't know if the drug works because Ebola patients are being treated with multiple therapies. Dr. Rick Sacra, the U.S. doctor who contracted Ebola while treating patients in West Africa, received TKM-Ebola in addition to serum from the blood of another cured Ebola patient, among other therapies. In conversations with analysts and investors, Tekmira's management has said TKM-Ebola is being administered in small doses and without the need for pre-treatment with steroids. This backs up the company's assertions about the advantages of its delivery platform.

I've been skeptical about the significance of the Ebola treatment opportunity for companies like Tekmira, but it's time to reassess. The Ebola outbreak in West Africa is not under control and authorities are eager to use experimental therapies on affected patients. Tekmira, GlaxoSmithKline  (GSK) and Sarepta Therapeutics (SRPT) are contributing their respective Ebola therapies to a public-private consortium which has plans to begin studies before the end of the year. Depending on the outcome of these studies, it's entirely possible that Tekmira receives a stockpile order(s) for TKM-Ebola. I have no idea how big such an order might be, but RBC analyst Michael Yee guesses $75 million to $100 million from the U.S. Yee doesn't include the potential for similarly sized stockpile orders from other governments or public health groups like the Gates Foundation, for instance. Revenue from Ebola stockpile orders wouldn't recur regularly, it'll be lumpy depending on the need, but it's a nice non-dilutive way to raise cash.

Expect Tekmira to continue trading with volatility based on Ebola headlines. Tekmira doesn't want to be pegged as an Ebola company but would prefer investors see Ebola as upside while focusing more on other programs, most notably its hepatitis B therapy. On that front, animal studies are still underway, with a safety study in healthy human volunteers the next step. Tekmira is holding an analyst/investor day on Nov. 21. 


Frank R. asks, "I wrote you a few months back regarding Galena Biopharma ( GALE) . You were right on about Galena, but unfortunately I wasn't. Anyway, since you are far more in the know than me, I'm wondering what you think of  Agios Pharmaceuticals ( AGIO) ?"


I like Agios. I last wrote about the strong responses seen in patients treated with Agios' cancer metabolism drug AG-221 in April. The next big clinical data from Agios will be at the American Society of Hematology annual meeting in December. 

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

More from Stocks

Micron is Trading Ugleeeee

Micron is Trading Ugleeeee

Sohn Investing 2018: A Recap

Sohn Investing 2018: A Recap

CHART: Here's How Much Apple Stock Has Lost in Value in the Last Five Days

CHART: Here's How Much Apple Stock Has Lost in Value in the Last Five Days

Wall Street Is Totally Forgetting Apple Will Be Giving Away Tons of Cash in 2018

Wall Street Is Totally Forgetting Apple Will Be Giving Away Tons of Cash in 2018

United Technologies Tops Target on Strong Aerospace Business

United Technologies Tops Target on Strong Aerospace Business