Two weeks ago, Tekmira Pharmaceuticals (NASDAQ: TKMR) and OnCore Biopharma announced a merger agreement, creating the premier HBV drug developer. According to the press release on January 21, the new Tekmira has dosed the first subject in a Phase I clinical trial of TKM-HBV. Several biotech companies (e.g., GILD/GBIM, ARWR, ALNY, ISIS) are developing HBV drugs. Tekmira has two advantages over other companies:
1. Respected management team
OnCore Biopharman was founded by former executives of Pharmasset which successfully developed blockbuster hepatitis C drug sofosbuvir and was acquired by Gilead Sciences (NASDAQ: GILD) for $11 billion. Michael Sofia, the inventor of sofosbuvir, will step into the role of Chief Scientific Officer. Investors may expect the same Sovaldi-like success in hepatitis B.
2. Combination therapy
Although several nucleoside analogues and interferon-α have been approved for the treatment of hepatitis B, currently available therapies do not lead to cure. Tekmira’s strategy is to take a combination approach toward an hepatitis B cure. The company is building a robust portfolio of compounds with eight distinct mechanisms. Advancing multiple programs at the same time may increase the chances of success.
Most of Tekmira’s candidates have yet to enter the clinic, and investors should take great risk. Although the prevalence of hepatitis B exceeds that of hepatitis C globally (350 vs. 200 million), the hepatitis B market may smaller than that of hepatitis C, because the disease is now only common in East Asia and sub-Saharan Africa. In the U.S., there are only 1.4 million patients with hepatitis B.