UPDATE 2-Tekmira shares surge on Pfizer collaboration

Tue Mar 16, 2010 2:09pm EDT

* To collaborate with Pfizer on RNAi delivery technology

* Tekmira looking to sign more collaborative deals in 2010

* Tekmira shares up 24 pct (Adds background, analyst comments; updates share movement)

By Gowri Jayakumar

BANGALORE, March 16 (Reuters) - Tekmira Pharmaceuticals Corp (TKM.TO) said it would collaborate with Pfizer (PFE.N) to evaluate the use of its technology to deliver, with a higher degree of stability, Pfizer's gene "silencing" mechanism, sending its shares up 24 percent.

Canada-based Tekmira's stable nucleic acid-lipid particle (SNALP) technology uses lipid nanoparticles to deliver RNAi therapeutics, such as siRNAs used to treat a range of diseases, to its target by protecting the drug from degrading quickly.

"It (the collaboration) adds further validity and support to Tekmira's SNALP technology, and that is what is driving investor interests," said Pooya Hemami, an analyst with Desjardins Securities.

This is Tekmira's first formal research collaboration with Pfizer. Tekmira is also working with Alnylam Pharmaceuticals Inc (ALNY.O) and Swiss drugmaker Roche Holding AG (ROG.VX), both of whom are developing drugs using the SNALP technology.

"So if other companies like Bristol-Myers Squibb (BMY.N) and Pfizer, which have initial agreements with Tekmira, were to develop more comprehensive licensing agreements, it would be very positive to the extent of the depth of the potential revenue for the technology," Hemami said.

The news of the collaboration sent Tekmira's shares up 24 percent -- its highest percentage gain in 10 months -- making it one of the highest gainers on the Toronto Stock Exchange. The stock was up 20 percent at 84 Canadian cents in afternoon trade.

FLU FEARS

One of the concerns with the SNALP technology is safety. In January, an early stage trial for Tekmira's own internal cholesterol drug candidate using the same technology showed that one of the two patients, treated at the highest dose level, experienced flu-like symptoms.

"My main concern really, and I think for a lot analysts covering the company, is the safety of the technology. There were concerns with the first phase study of ApoB SNALP as there was a case of flu-like response," Hemami said.

The ApoB SNALP is expected to start early stage studies again in the second half of this year.

"So what investors will be looking for is whether or not the new revision...eliminates the risk of immune response," the analyst added.

Pfizer will evaluate Tekmira's SNALP formulations in preclinical models. Financial terms of the collaboration were not disclosed.

"Our goal is to sign additional collaborative agreements in 2010," Mark Murray, Tekmira's chief executive officer said in a statement.

Pfizer's shares were trading down 10 cents at $17.16 on the New York Stock Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Savio D'Souza)