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 (NASDAQ:IDRA), a clinical-stage biopharmaceutical company focused on developing therapies to treat cancer and other rare diseases, vaulted higher by as much as 15% during Monday's trading session after providing an update on one of its clinical compounds.
So what: According to Idera's pre-market press release, it announced positive phase 1 clinical data for cancer drug IMO-9200, an antagonist of toll-like receptors 7, 8, and 9. The data, which involved a subcutaneous injection of IMO-9200 in escalating single-dose levels, as well as a cohort that received multiple doses over a four-week period, demonstrated that IMO-9200 was safe and well-tolerated across all dosing regimens, with no serious adverse events reported.
On top of reporting positive phase 1 data, Idera also announced new preclinical data for IMO-9200 at the 2015 Digestive Disease Week Conference. In mouse models with colitis, the preclinical data suggests an oral formulation of IMO-9200 may be effective in treating inflammatory bowel disease.
Now what: RNA-based therapeutics have offered promise for years in treating cancers, but unfortunately positive results have been largely outweighed by disappointments.
Idera's phase 1 data on IMO-9200 is definitely good news, but let's not also get carried away with the data being presented. Aside from mouse model preclinical data, the company is suggesting nothing more than the idea that its therapy was well-tolerate in clinical studies -- which is really the ultimate goal of phase 1. We haven't really heard anything about efficacy and what IMO-9200 can do for a variety of autoimmune diseases that it may be tested on, and it may be a while until we do hear this information.
In the meantime, Idera is continuing to burn through its remaining cash on hand, which totaled a little over $41 million in the previous quarter. Its cash burn rate of $31 million over the trailing 12-month period would imply that the need for another cash raise is becoming imminent -- and that often means share dilution for investors unless Idera can snag a licensing or collaborative partner.
For now, given the above uncertainties, I'm perfectly happy staying put on the sidelines and would suggest all but the most risk-tolerant investors consider the same tactic.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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