Tekmira shares soar on U.S. contract
Vancouver-based Tekmira Pharmaceuticals Corp.'s shares soared Friday, a day after the firm announced a contract with the U.S. Defence Department worth up to $140 million.
Stock in the biotechnology company that specializes in developing gene-blocking treatments gained 51 cents, or 38 per cent, to close at $1. 85 in trading on the Toronto Stock Exchange, amid a general selloff on the markets.
Friday saw the first trading since a halt was imposed at mid-afternoon Thursday as the deal was announced.
The initial contract will advance a therapy that can treat Ebola virus infection for the department's chemical and biological defence program.
It is worth up to $34.7 million over the next three years and has an extension option that could provide the company with up to $140 million in funding for the entire program.
The treatment targets the lethal Zaire species of the Ebola virus, which has been associated with outbreaks of hemorrhagic fever in humans and for which there is currently no treatment or cure.
The U.S. government is interested in the treatment to protect soldiers from emerging and genetically altered biological threats.
Tekmira has developed a nanoparticle technology it calls SNALP, or stable nucleic acid-lipid particle, to deliver small interfering genetic material — called RNA or siRNAs — that can block the action of a disease-causing gene.
The expectation is that it will prove in clinical trials to prevent the Ebola virus from replicating while the immune system gears up to fight it.
Pooya Hemami, a bioscience analyst at Desjardins Securities, says the contract obtained by Tekmira is a major display of confidence in its technology from one of the biggest militaries in the world.
"The fact that they're willing to spend $140 million to develop the drug, which has not yet shown efficacy in humans, shows that they're willing to spend a considerable amount of money if the drug can reach approval stages," he said.
While Ebola is a very rare disease — only 1,800 cases have been reported since it was discovered in the 1970s — it is also very lethal, with mortality rates reaching 90 per cent, Hemami said.
"Because of that, there have been concerns that it could be used as a biological weapon and I think that's why the Department of Defence is willing to pursue this project," he said.
With files from The Canadian Press