What We’re Trading, What We’re Stalking

Shares of Tekmira Pharmaceuticals (TKMR) have been on an absolute tear. Already since our January 7th reiteration to PropThink Premium members to own the stock, TKMR is up a massive 147%. But, on Friday the 21st Tekmira filed a shelf registration, spooking investors, and the stock slid off from strength early in the day. In an unusual move, Tekmira addressed the filing in a press release, suggesting that the $150M registration statement is intended to give Tekmira “the flexibility to take advantage of financing opportunities when market conditions are favourable.”

Absolutely. This is a smart move from management in an incredibly strong environment for RNAi/antisense issuers. (Of note, the statement isn’t in effect, so TKMR can’t use the shelf quite yet.) We wrote about this demand phenomenon just this Wednesday after Arrowhead Research (ARWR) raised more than $100 million through a secondary offering – the stock has continued to climb despite the dilution. Tekmira’s valuation relative to peersremains quite compelling. Read more of PropThink’s TKMR coverage, and see our brief look at Arrowhead’s financing history, here.

Onconova Therapeutics’ (ONTX) phase 3 ONTIME results this week were a disappointment, and the stock is down nearly 70% from when we profiled the IPO last year. In the study, high-risk myelodysplastic syndrome (MDS) patients treated with rigosertib plus best supportive care showed a median overall survival benefit of 2.4 months compared to patients receiving best supportive care alone. But the combination reduced the risk of death by just 14% compared to standard of care; the benefit wasn’t large enough to be statistically significant, which is why the trial was deemed a failure. ONTX has been a contentious name since the stock tumbled from its post-IPO highs. David Sobek ofTheStreet.com this week did an excellent job explaining why the company’s – and investors’ – assumptions regarding overall survival in the best supportive care arm of the trial were, essentially, outdated. ONTX is pointing to a survival benefit in a subset of the high-risk MDS patients as reason to continue development, but we’re not very optimistic.

Last week, we outlined why Progenics (PGNX) isn’t in the portfolio, indicating a lack of near-term catalysts and the risk of dilution through an equity offering. This Friday, Progenics fell in line, conducting a secondary offering that took the stock off of its recent strength. It’s difficult for us to believe in the company’s PSMA ADC program, but there may be reason to get long PGNX yet this spring. Subscribe to PropThink Premium to stay up to date.

Shares of Synergy Pharmaceuticals (SGYP) got some love at the end of this week following coverage through the popular investment opinion outlet Seeking Alpha. We’ve been talking about SGYP since last summer when the stock dipped into the low $4-range. You can still catch up on why we think SGYP is an attractive opportunity in this report.

AcelRx (ACRX) is one to keep an eye on in 2014, particularly coming into mid-year. We discussed AcelRx in a note to PropThink Premium subscribers in November, noting that under $7.00 ACRX was an attractive fundamental holding. That trade has panned out beautifully (+70%), though we’re looking towards the rest of the year for more action. Read more here.

Miss our report on Alcobra (ADHD) last week? We wrote about some aspects of the long-term story that would be good for any shareholder to understand.

In connection with TKMR, ARWR, SGYP, ACRX, and ADHD, PropThink has taken a long position.