Reality Sets in for Ebola Drug Hopefuls

Health and Healthcare

Published: October 6, 2014 2:05 pm

Tekmira Pharmaceuticals Corp. (NASDAQ: TKMR), along with other biotechs Sarepta Therapeutics Inc. (NASDAQ: SRPT) and BioCryst Pharmaceuticals Inc. (NASDAQ: BCRX), took a hit in the market Monday after an analyst downgrade. Though this downgrade was only on one company, the group is suffering as a whole.

Leerink Partners downgraded Tekmira to Market Perform from Outperform with a price target of $30, up from $25. This downgrade was due to a lack of visibility of stock-moving catalysts in the near term. Also Leerink considers the possibility that the significant Ebola profits might already be implied within the stock. Tekmira shares are up 230% from the lows in July.

Monday, Tekmira saw its shares fall 15% to $25.04 from the previous close of $29.53. The range on the day was $23.65 to $27.18. Tekmira has a consensus price target of $25.38 and a 52-week trading range of $7.17 to $31.48.

The analyst call from Leerink Partners not only affected Tekmira, but it had resounding impact on the rest of the Ebola vaccine producers. Because the value of Tekmira is relative to that of Sarepta and BioCryst, it dragged their shares down along with it.

We saw the same thing happen recently when Ford tanked and brought GM down along with it after issuing guidance.

ALSO READ: 8 IPOs Coming This Week

Shares of Sarepta dropped roughly 5.5% to $22.08 from the previous close of $23.30. The range on the day was $21.66 to $23.63. Sarepta has a consensus price target of $37.94 and a 52-week trading range of $12.12 to $55.61. It also has a market cap of $903 million.

BioCryst saw its stock drop almost 9% to $11.67 from its previous close of $12.80. The range on the day was $11.10 to $12.45. BioCryst’s a consensus price target is $17.73 and it has a 52-week trading range of $4.55 to $14.62. Its market cap is $829 million.

Another factor potentially influencing the downturn of these Ebola-related stocks was the recent FDA approval of a new investigational treatment for Ebola, brincidofovir, produced by competitor Chimerix Inc. (NASDAQ: CMRX).

Chimerix had traded 4% up to $31.30, with two hours left in regular trading, from the previous close of $32.00. The range on the day is $30.52 to $32.86. The stock has a consensus target price of $32.43 and a 52-week trading range of $12.96 to $32.86. The market cap is $1.1 billion.

ALSO READ: Chimerix Wants Its Piece of the Ebola Pie

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