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Tekmira Pharmaceuticals Corporation Message Board

  • danlukehart danlukehart Mar 1, 2012 2:38 AM Flag

    Tekmira Updates Financial Guidance and Extends cash runway

    Tekmira released financial a guidance update. In summery, they have raised $4,000,000 in private placement offering to be used for the legal battle against Alnylam. New shareholders in the private placement must hold the shares for at least 4 months. This cash raise further extends their cash runway to second half of 2013. The 3 million dollar loan they got from silicon valley bank a while back may or may not be used. If they chose to use it, they will pay monthly starting in October until 2015 at 8% interest.

    My commentary is that the loan is going to be used only in the event of the trial. They would probably draw down on the loan shortly before the trial. Its no coincidence they have until October to choose to use it or not. They would prefer to pay for pretrial expenses with the private placement as they do not have to pay interest and the shareholders.

    By my estimate, based on todays closing price it dilutes the shares to around $2.40. It brings the total shares to around 12.1 million. I think however, that this cash raise will ease many investors worries as it gives Tekmira some legal teeth. Alnylams strategy has in part appeared to be to simply outlast Tekmira and make them spend as much money as they can until they go bankrupt.

    My interpretation is this cash raise as the behind the scenes attempts to settle have gone poorly. If a settlement or buyout offer was even close to reasonable, they would not dilute their stock. They need to show they can follow through on the whole lawsuit to push them at the bargaining table.

    I think this overall is a plus for current shareholders. Most holding the stock believe in the merits of the lawsuit and my personal biggest fear is that they would just get squashed under the financial burden of a costly lawsuit. I think if anybody is selling around 2.35 tomorrow, I will be buying. I think we will see more volume than the tepid amount we have seen the past few weeks.

    What are your thoughts? overall positive for the cash to follow through on the lawsuit or negative because of share delusion?

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    • >> and it's going to take some stunning success

      I agree, but I think the TTR and PCS have already started this process. The great thing about rnai, if they can get it to work in the right cells, it just opens up many targets. All we need is more progress, TTR02 will do that, PLK will probably help, and more pre clinical data. In de end both TKMR and ALNY should benefit and be able to do deals with partners.

    • Do you think management has the results of the PLK trial in-hand? Release of those results has been promised by the end of the first quarter. If they were strongly encouraging, why would management raise money less than 30 days from a potentially stock-price boosting announcement? The company is not under the gun to raise cash; a month's delay would make no difference. One might infer from the financing that the Phase 1 trial data showed the drug to be safe, and perhaps deliverable, but did not demonstrate impressive efficacy in reducing tumor size, a hoped-for secondary endpoint. While it could be that management has yet to see trial data, and did the private placement to hedge against a disappointing result, is that very likely so close to the announcement deadline?

      • 1 Reply to davidsandler123
      • They may have some numbers. But I think there are many good reasons why they either don't have anything meaningful they can put out there, or maybe they even can't.

        Based on what you write I think you and many others probably expect way too much from this trial. I'll try to explain.

        Cancer is a terrible condition and don't expect any type of treatment to just cure it, it's complex, and trials are difficult as well.
        When you do a trial like this you need to get people that have not much hope and meet all your criteria to enter the trial.
        Doctors will simply not recommend something when they have other more advanced treatments in P2 or P3 trials.
        So they get the patients where this is hardly any hope. Most unfortunately will probably not respond because everything else has already failed.

        This is a phase 1, so they are looking for safety with just some signs of that it does something, so they can go to patients in the next phase 1 or 2
        with better chances

        PLK1 as I understand it will, certainly at first, not be a single agent, and probably also not later. It will probably be used together with chemo. So again,this
        is where you really hope to see efficacy in phase 2 together with chemo.

        The first part of the phase 1 will start at the lower dosing. So do you really expect any efficacy here?

        This is first generation PLK1. Do you really expect any efficacy, except at probably the highest dose. In fact
        I expect that with all the progress they have been making that they will probably start another phase 1 if there are
        signs that PLK1 is the right target. Why continue with PLK1 with first generation if you can do PLK1 with 3rd generation?

    • Positive, they can not keep developing products and go to court at the same time without money. They needed a little, so they got a little. If they win some of the claims against ALNY they will more than get this back.

    • Forgot to finish a sentence:

      **They would prefer to pay for pretrial expenses with the private placement as they do not have to pay interest and the shareholders footing the bill with via mild delusion.

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