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Eleven Biotherapeutics Inc (NASDAQ:EBIO) Defies The Bears

Eleven Biotherapeutics Inc (NASDAQ:EBIO) Defies The Bears
Written by
Alex Carlson
Published on
June 6, 2016
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InsidrFinancial

The chatter on the Twittersphere is generally constant bashing on Eleven Biotherapeutics Inc (NASDAQ:EBIO) from the bears and the short sellers. In spite of what the bears are saying, shares of EBIO continue to climb higher and are up over 900% off the lows seen earlier this year in February. Even the news editors over at Seeking Alpha tried to talk down the company with Friday's news headline "Eleven Bio continues up: dilution on the horizon." While the headline caused shares to back off the highs, EBIO still finished higher on the day by over 20% and on over 20 million shares changing hands. The question becomes who will be laughing in the end?Eleven Biotherapeutics, Inc. is a preclinical-stage biopharmaceutical company with a proprietary protein engineering platform, called AMP-Rx, that it applies to the discovery and development of protein therapeutics to treat diseases of the eye. Eleven’s therapeutic approach is based on the role of cytokines in diseases of the eye, the company’s understanding of the structural biology of cytokines and the company’s ability to rationally design and engineer proteins to modulate the effects of cytokines. Cytokines are cell signaling molecules found in the body that can have important inflammatory effects.The tiny biotech's most advanced preclinical product candidate is EBI-031 for treatment of diabetic macular edema, or DME, and uveitis. EBI-031 was designed and engineered for intravitreal delivery using Eleven’s AMP-Rx platform. EBI-031 is a potent blocker of both free IL-6 and IL-6 complexed to the soluble IL-6 receptor (IL-6R) and has demonstrated a longer vitreal retention time in preclinical models than antibodies and antibody like molecules approved for intravitreal injection. Eleven is undertaking the necessary manufacturing development work and nonclinical safety studies to support the submission of an investigational new drug application, or IND, to the FDA in the first half of 2016 for the purpose of conducting clinical trials of EBI-031 in DME and uveitis.The move off the lows started back in April after a Waltham, Massachusetts genetic testing firm analyzed the results of the recent Phase 3 trials by EBIO and found that patients with certain genetic patterns were more likely to respond to the drug. Interleukin Genetics Inc (OTCMKTS:ILIU) presented new data from post hoc analyses (an analysis done after a trial has been completed as opposed to a predifined analysis) on the relationship between its IL-1 genetic patterns and patients whop responded to Evelen’s drug, isunakinra (also called EBI-005) in severe allergic conjunctivitis and severe dry eye study subjects.Investors bought back into EBIO because with the help of Interleukin Genetics tests, Eleven may be able to seek approval of its drug (an eyedrop) in certain patients despite that fact that it failed to show a statistically-significant effect in treating those with dry eye disease last May, and patients with severe eye allergies earlier this year. CEO Abbie Celniker said:

“We remain on target to make our planned submission of an investigational new drug application for EBI-031 for the treatment of diabetic macular edema this quarter. In addition, we were pleased to have several opportunities to showcase our data at this week’s ARVO Annual Meeting. We also continue to evaluate strategic alternatives, as previously communicated, with a goal to maximize shareholder value.”

Currently trading with a market cap of $42 million, EBIO had $13.4 million in cash as of March 31, 2016. On March 1, 2016, EBIO prepaid all outstanding amounts owed to Silicon Valley Bank with existing cash on hand and terminated its loan agreement. The biotech believes that its current cash and cash equivalents will be sufficient to fund operating expenses into the fourth quarter of 2016.In terms of who will be laughing in the end, it's all a matter of whether EBIO can succeed with its new drug application. While that remains to be seen, right now the momentum is with the bulls. Shares continue to climb higher and Mr Market is telling us that EBIO wants to go higher. It's much easier to make money by going with the trend rather than fighting it. We will be updating Insider Financial as soon as we know more. For continuing coverage on EBIO, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in EBIO and have not been compensated for this article.

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