AVI BioPharma, Inc. (NASDAQ:AVII)

Profit is the impossible dream here

I dumped AVI close to the bottom in December for a loss, and didn't get a chance to pick it up again before the surprise biotech bull market (I wanted it at the 0.5 threshold). Now I find myself gingerly handing out red thumbs to the baby bios that all started running up in late December without catalysts, hoping I'm not pushing against the edge of some ridiculous new biotech bubble.

Over the last five years AVI has been a consistent underperformer, with slow progress and little clinical success from their antisense pipeline. The current projects in clinical development bear little resemblance to the coronary stent and hepatitis C-related compounds I remember from 2007. The enterprise value of the company seems largely dependent on the results of the phase IIb trial of eteplirsen in Duchenne muscular dystrophy. Given the shaky nature of the positive topline data from the phase I/II trial of eteplirsen, histologic evidence of dystrophin-positive muscle fibers, I believe there is low likelihood of seeing a clinical effect in the phase IIb trial. I don't see any clear pathway towards profitability in the foreseeable future through the antiviral compounds that remain in phase I.