Why Idera Pharmaceuticals, Inc. Shares Slipped From a Huge Pop Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Idera Pharmaceuticals, Inc. (NASDAQ: IDRA  ) began Thursday's trading with a pop of over 15%, but have been falling throughout the trading day and might possibly return to breakeven by the closing bell.

So what: The day's gains kicked in once Idera publicized an agreement with Abbott Labs (NYSE: ABT  ) to develop a companion diagnostic for genetically defined forms of B-cell lymphoma. The test, which Abbott will develop, will be administered in vitro to detect the presence of MYD88 L265P oncogenic mutations in tumor biopsy samples. This will help determine the feasibility of treating such mutations with Idera's development-stage toll-like receptor antagonist drug IMO-8400.

Now what: The unsustainability of today's pop might simply be due to the fact that Idera's shares had already grown 1,000%, and then lost roughly 60% of that pop, over the past year -- shareholders are still sitting on a four-plus-bagger for the past 12 months, which implies that most of the optimism over IMO-8400 might already be baked into Idera's share price.

Idera itself notes that the particular variants of B-cell lymphoma it hopes to treat with IMO-8400 are only diagnosed in a total of 3,200 Americans every year, which is a rather small number of potential patients. Of course, Idera's shares have been horrible performers on a longer timeline -- they've lost over 99% of their value since going public in the 1990s -- so at this point, investing here is probably more speculation than anything else.

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  • Report this Comment On May 08, 2014, at 3:35 PM, markst430 wrote:

    The author makes the point that IMO-8400 is designed to treat B Cell Lymphoma, a condition that is diagnosed in only 3,200 Americans each year. What he does not write is that there are likely over 30,000 Americans living with that condition today, and more than that number of people in the rest of the world. What he also does not write is that Idera has had phase 2 success in the treatment of moderate to severe plaque psoriasis, a rather large market. It is working on curing or ameliorating a number of other diseases with good indications of efficacy, including polymyositis, dermatomyositis, Waldenström’s macroglobulinemia, among others. How could Motley Fool have let this article out? Do you not double check?

  • Report this Comment On May 08, 2014, at 3:48 PM, TMFBiggles wrote:

    @ markst430 -

    This article only covers the reason why Idera popped today. It's not meant to be a comprehensive review of the company's business or its drug pipeline, hence the reason why the title is "Why Idera Pharmaceuticals, Inc. Shares Slipped From a Huge Pop Today" and not "Here's Everything You Need To Know About Idera Pharmaceuticals In One Really Detailed Writeup."

    - Alex

  • Report this Comment On May 08, 2014, at 4:11 PM, demonroach wrote:

    Agree. Optimism is way down, not because price is baked in, but because of the market direction in the past month has created shortsightedness in shareholders holding big bags.

    But there is no doubt that good stuff is happening to IDRA, and once this bear market in bios is over, should see nifty gains.

  • Report this Comment On May 09, 2014, at 10:51 AM, Daedalus43 wrote:

    Alex, if your article really only covers the reason why Idera popped yesterday, then it should've stopped there. Once you brought it the 90's(!) and investing "advice", then you were irresponsible by not being even a little more detailed.

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Alex Planes

Alex Planes specializes in the deep analysis of tech, energy, and retail companies, with a particular focus on the ways new or proposed technologies can (and will) shape the future. He is also a dedicated student of financial and business history, often drawing on major events from the past to help readers better understand what's happening today and what might happen tomorrow.

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