Idera Pharmaceuticals Inc (NASDAQ:IDRA) is currently assessing strategic options with previous lead treatment ‘IMO-8400’, opting instead to shift its resources on IMO-2125. Following the secondary offering, the firm should have enough capital to advance its pipeline through main inflection points at this year-end and in 2017.

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Recently released data was promising in a study assessing intratumorally injected ‘IMO-2125’ in combination with ipilimumab in subjects who failed prior PD-1 treatment. Idera’s CEO seems very bullish on the prospects. PD-1 refractory melanoma signifies a fast-to-market chance, while additional upside subsists from expansion studies in other oncology indications. Report for all 4 cohorts of the underway combination study should be available by this year’s end, indicating a potential watershed episode for the firm.

The highlights

A look at Idera pipeline highlights mostly preclinical or early phase drug candidates that are still far away from reaching value-creating inflection points. Unfortunately, it has been a poor year for the firm’s shareholders. In December 2016, the stock plunged after the firm announced positive data for lead program ‘IMO-8400’ that apparently weren’t encouraging enough.

Since then the equity has been doing nothing, with indications of strength seen only in the last two months as the biotech market rebounded. This returning strength was cut short when the company’s management decided to get additional capital through a secondary offering, which was again a quite hefty dilution for investors considering the firm’s current $250 million market cap.

The performance

For 2Q2016, Idera posted a net loss of $13.5 million, a jump of 6% from the comparable quarter last year. Revenue came at $0.3 million, while R&D expenses surging to $10.1 million from R&D expenses of $9 million reported in the same period last fiscal.

As of June 30, 2016, the firm had cash balance of $64.1 million, down from cash balance of $87.2 million posted at year end 2015. If the proceeds raised from the secondary offering are factored in and assume cash balance utilization for 3Q2016 of $14 million, the firm should have cash and equivalents of nearly $100 million. With a market capitalization of $250 million, the market is seemingly valuing the firm at just $170 million if cash is burned out!