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Why Shares in Idera Pharmaceuticals, Inc. Dropped 10% Today

By Todd Campbell - Jan 15, 2016 at 3:51PM

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An update on its progress in advancing drugs to market fell short of investor hopes.

Image source: Idera Pharmaceuticals.

What: After presenting at the J.P. Morgan healthcare conference on Wednesday and hitting a new 52-week low yesterday, shares in Idera Pharmaceuticals (IDRA -1.41%) slumped by another 10% earlier today.

So what: The clinical-stage developer of drugs for the treatment of cancer and autoimmune diseases offered an update to investors on its development activities for various drugs in its pipeline earlier this week, but the update failed to ignite investor interest.

The company's lead product candidate is IMO-8400, which is in mid-stage studies as a treatment for Waldenstrom's macroglobulemia, a rare blood cancer. IMO-8400 is also being studied as a therapy for diffuse large B-cell lymphoma.

Other drugs in Idera Pharmaceuticals' pipeline include toll-like receptor (TLR) targeting therapies that influence the innate immune system. Early-stage research programs are under way evaluating TLR approaches for the treatment of rare autoimmune diseases, including dermatomyositis.

Now what: Despite Idera Pharmaceuticals having been around for nearly 20 years, its most advanced drugs are only in mid-stage trials, and given that trials for additional product candidates are expected, R&D expenses are likely to mount.

The company's trailing-12-month operating expenses totaled $48.75 million through September, and the company's balance sheet boasted just $95 million exiting Q3, so there's a good chance Idera Pharmaceuticals will be on the hunt for new funding, which could dilute investors.

Investors should gain some insight into IMO-8400 in DLBCL this year (the primary completion date for its ongoing trial is slated for April), but it could still be years before a drug hits the market, and for that reason, investors may be wise to approach this company cautiously until there's more clarity into a commercialization timeline, or insight into how the company plans to raise more cash. 

Todd Campbell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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