Hookipa Pharma Up 42% Premarket On Gilead Agreement Change – Next Is?

Hookipa Pharma Inc (NASDAQ: HOOK) stock hasn’t been doing well of late. From a high, back in May last year, of $19 and change it’s been bumbling along in this new year at the $1,50 and the like level. That’s a lot of pain for folk who have held through that time. It also aids in explaining the 14% short interest which is something we’ll come back to.

We might think that Hookipa should be doing better than this. Just last month they received fast track status from the FDA for their drug combo for head and neck cancer. That’s the sort of thing that often does produce a significant stock price jump but it didn’t for Hookipa. The reason it might have done is that the fast track system significantly reduces the costs of progressing through to full authorisation and thus sales.

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However, Hookipa has more than the one string to its bow, it has long had an agreement with Gilead concerning its arenaviral platform – the specific interest being in HIV and Hepatitis B. Despite the successes of those many other HIV antivirals this is still a field wide open for further breakthroughs. We don’t, not really, know how to cure any viral disease as yet. Vaccinate against, yes, treat and alleviate, yes, but actually cure not so much.

So, the field is still of great interest. Which is what seems to have led to this change in the Gilead arrangement with Hookipa. The specific regime is already licenced to Gilead, assuming it works. But of course, at present we’re in that hell of the drug development process, showing that it does work. That being how that system works, show that it’s not poisonous, show that it works, then in widespread tests show that any side effects are less than benefits and then, finally, maybe, get a licence to sell.

The current stage is the Phase Ib tests and those are to continue, This is bullish news as an awful lot of drug developments do get cut at this stage. Further, Gilead is to find these tests with a prepayment to Hookipa.

On the downside, of course, is that this is still a long way from proving that there’s a viable treatment here and so substantial revenues to follow. It’s a vote of confidence in the line being taken but no more than that.

Which brings us back to the short interest. 14% short interest in Hookipa isn’t overwhelming. But the stock price jump of 40% today could well trigger some rethinking there. This could go either way of course. It’s possible that having burnt fingers will mean purchases to close out those sorts. That would further boost the Hookipa stock price. Or, given the price rise, perhaps the short looks even more appealing and so the short position will rise.

It’s possible to be either side of that analysis and any trading position has to be taking the right side of it.