ZMapp Lands Government Contract for Ebola, Seems to be Government Favorite over Tekmira

It was reported today that the Department of Health and Human Services has contracted Mapp Biopharmaceuticals to develop their Ebola drug, ZMapp. It certainly looks like ZMapp continues to be the “favorite” for Ebola drug that’s going to be continually sponsored by the government and potentially “get the call from the bullpen” by the FDA. 

The government is going to producing funding of up to $42 million for the project. That’s a significant amount that, if investing in Tekmira, could strengthen their financials while giving them significantly more credibility. If Mapp were public, I’d consider being long. Tekmira, I’m still not convinced it’s not all based on hype.

Tekmira shares were off today, but not as much as I’d expect. Bulls still contend the company is a buyout target. 

From the Department of Heath and Human Services:

The development of a medication to treat illness from Ebola will be accelerated under a contract with the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response (ASPR). This contract supports the governmentwide response to the Ebola outbreak in West Africa.

ASPR’s Biomedical Advanced Research and Development Authority (BARDA) will provide funding as well as access to subject matter expertise and technical support for manufacturing, regulatory, and nonclinical activities through a $24.9 million, 18-month contract with Mapp Biopharmaceutical Inc., of San Diego, California. ASPR can extend the contract up to a total of $42.3 million.

Work under the contract supports the development and manufacturing of the medication ZMapp toward the goal of U.S. Food and Drug Administration approval.

“While ZMapp has received a lot of attention, it is one of several treatments under development for Ebola, and we still have very limited data on its safety and efficacy,” explained Dr. Nicole Lurie, assistant secretary for preparedness and response. “Developing drugs and vaccines to protect against Ebola as a biological threat has been a long-term goal of the U.S. government, and today’s agreement represents an important step forward.”

The Defense Threat Reduction Agency (DTRA) within the Department of Defense and the National Institute of Allergy and Infectious Diseases (NIAID) of HHS’ National Institutes of Health supported initial work on this product. To speed the development of ZMapp, BARDA will work closely with those agencies. BARDA also will work with the company to optimize and accelerate the manufacturing of ZMapp so testing can be done as soon as possible.

Disclosure: I hold TKMR puts and calls.

One thought on “ZMapp Lands Government Contract for Ebola, Seems to be Government Favorite over Tekmira

  1. The issue is not with TKMR, the issue is with its investors. This stock has been severely pumped. When you include the Canadian volume, the float turns over weekly and the entire market cap turns over in less than three weeks. There is nothing wrong with the company: it is a pretty good early stage biotech researching the possibilities for RNAi. They have a long way to go to get commercialized. And that is what the market has forgotten since it discovered the stock two months ago. They suddenly think because Ebola is creating a tragedy in West Africa that it will get their drug approved quicker and more certainly than if the outbreak were quelled. And that is very faulty investor logic.

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