Eiger Bio (EIGR) small-cap that drew 1,500 January $5 ITM calls on 8/31 for $3.60 to $3.70, over 60X average volume, as shares base in a narrow multi-week range. EIGR has been a laggard biotech for much of the year after trading up near $12.50 in January. The $269M company focuses on targeted therapies for rare and ultra-rare diseases. Their pipeline has four programs with Breakthrough Therapy Designation. EIGR’s leading commercial drug is called Zokinvy, the only approved treatment for progeria, aka Hutchinson-Gilford progeria, a genetic condition whereby someone undergoes a dramatic, rapid appearance of aging beginning in childhood. The company launched the drug in the US in January and expects to receive EU approval in the 2H of 2021 which would double their TAM. Elsewhere, EIGR has three programs in Phase 3 studies or ready for Phase 3 studies across Hepatitis and Post-Bariatric Hypoglycemia. They also have a Phase 2 study ongoing in Congenital Hyperinsulinism.

Their biggest program by far is in Hepatitis Delta Variant or HDV which they estimate is a $1B market opportunity with just 3% of the market penetrated. HDV is the most severe form of viral hepatitis with 60% of infected patients dying within ten years. 70% of patients infected with HDV get cirrhosis within 5-10 years. There are 300K patients globally. Lonafarnib is the first and only oral agent in development for HDV and has shown strong early results with limited AEs. Analysts have an average target for shares of $30 with a Street High $45. BTIG out with a positive note in December after Gilead bought a stake in Myr Pharma for €1.15B. Myr has a program in the HDV space and BTIG thinks the move validates the market and opportunity for EIGR. They note Eiger is in position to benefit from growth and increased awareness of the opportunity in HDV. Shares trade 47.2X sales and 2.5X cash with short interest just 2.5%. Hedge fund ownership fell 10% last quarter.