A Canadian company developing an experimental Ebola drug has seen its stock swing wildly in recent days, but analysts say the underlying outlook for Tekmira Pharmaceuticals Corp. hasn’t been swayed by the outbreak of the deadly virus.
Vancouver-based Tekmira’s stock closed down nearly 22 per cent at $20.25 on the Toronto Stock Exchange on Tuesday.
Tuesday’s drop followed a nearly 60 per cent surge over the previous two trading sessions.
Tekmira announced last Thursday that the U.S. Food and Drug Administration had “verbally confirmed” it would relax a clinical hold on its TKM-Ebola drug, potentially enabling its use in individuals stricken with the deadly virus.
The outbreak has killed more than 1,000 people in West Africa since March.
Jason Kolbert, an analyst at Maxim Group in New York, said investors were “freaking out” because a Spanish priest, who was reportedly treated with another Ebola drug called ZMapp, died Tuesday in Madrid after being flown out of Liberia.
Mr. Kolbert said he sees “no relationship whatsoever” between the prospects for ZMapp and TKM-Ebola, as the two treatments take completely different approaches.
“However, just as the people were focused on Ebola and kind of drove Tekmira shares higher, now you’re seeing selling in the stock. It’s just volatility associated with a lot of, I’d say, retail buying of Ebola biodefence names.
“It’s a pendulum. It tends to overreact.”
The World Health Organization said Tuesday that it is ethical to use untested Ebola drugs, but that countries using experimental treatments have a moral obligation to collect data so the world can learn how to combat the virus.
The statement makes no reference to the fact that these experimental therapies are currently in short supply.
On Monday, ZMapp’s San Diego-based developer, Mapp Biopharmaceutical Inc., said it had exhausted its supply of the product, components of which were created at Canada’s National Microbiology Laboratory in Winnipeg. Experts have said it will take three or four months for another small batch of ZMapp to be made.
It’s unclear how much TKM-Ebola Tekmira has in stock, or how quickly manufacturing of the drug can be ramped up.
Tekmira says its drug, which targets the cells where the virus replicates, is the most advanced Ebola treatment option in development.
The timelines for making TKM-Ebola available for “compassionate use” – providing a drug that has not been formally approved on an emergency basis – wouldn’t be too long, said Doug Loe, an analyst with Euro Pacific Canada.
“We’d be measuring those in days to weeks rather than weeks to months, as would be the case for other biologics that could be developed in this space.”
Tekmira has a $140-million contract from the U.S. government to develop TKM-Ebola, but last month a small human trial of the experimental drug was put on hold after safety issues emerged.