Shares of Immunomedics (NASDAQ: IMMU) plodded through a chunk of 2014 hovering around the mid-$3 range, but came to life in August to begin a string of five straight monthly gains that peaked near a 52-week high at $5.15 on the first trading day this year. That level still hasn’t been broken, the stock is actually down 2.3% this month through Wednesday, but that shouldn’t discount some positive happenings at Immunomedics as 2015 gets underway.
Analysts covering Immunomedics still see plenty of upside, including Wells Fargo initiating coverage on IMMU this month with an Outperform rating and a price target of $7.00-$7.50. Wells Fargo analyst Matthew Andrews expects 2015 to be a good year for Immunomedics with positive data from a Phase 3 trial of CD22-targeting humanized antibody epratuzumab for systemic lupus erythematosus (SLE) and a partnership for lead antibody drug conjugate (ADC) IMMU-132. Amongst views of some other analysts, Jefferies and Chardan Capital both have Buy ratings on Immunomedics with price targets of $6.00 and $9.00, respectively. Not every analyst carries as favorable of an opinion, including RF Lafferty downgrading the company from Buy to Neutral last August with a $4 price target.
ADCs are one of the promising areas in oncology detailed Wednesday (SEE: http://ir.baystreet.ca/article.aspx?id=57), along with p53 and CAR-T immunology therapies, as companies work to develop novel therapeutics to more efficiently hunt down tumors and destroy them with less damage to surrounding healthy cells than traditional therapies. IMMU-132 is made by conjugating SN-38, the active metabolite of chemotherapy drug irinotecan (marketed by Pfizer as Camptosar), to a humanized antibody (hRS7) that targets the TROP-2 receptor expressed on the surface of many cancer cells.
To date, ADC treatments are only FDA-approved for three indications, including two by Seattle Genetics’ (NASDAQ: SGEN): Adcetris for both Hodgkin lymphoma and systemic anaplastic large cell lymphoma. While Immunomedics and Seattle Genetics are making inroads by strapping an antibody to a cancer drug to home in on cancerous cells, others, such as Kite Pharma (NASDAQ: KITE) are making strides by re-infusing patients with their own T cells engineered with chimeric antigen receptors (CAR) to recognize and eradicate tumor cells, all promising areas that are keeping a spotlight on new ways to treat cancer.
Against that background, Immunomedics has strengthened its team and shown more encouraging data on its lead ADC. Dr. Francois Wilhelm, a 29-year industry veteran with prior positions at Onconova Therapeutics (NASDAQ: ONTX), Pfizer (NYSE: PFE) and Johnson & Johnson (NYSE: JNJ), to name a few, was brought on board as Chief Medical Officer early in the month.
In the pipeline, Immunomedics received a “Fast Track” designation from the FDA for IMMU-132 (sacituzumab govitecan) for the treatment of patients with triple-negative breast cancer who have failed prior therapies for metastatic disease. Previously, the FDA granted Fast Track status to IMMU-132 for the treatment of patients with small-cell lung cancer and an Orphan Drug designation as a therapy for patients with small-cell lung or pancreatic cancers. A Fast Track designation is, as it sounds, meant to expedite development of new drugs addressing areas of unmet medical need. The designation can include things such as priority review, rolling submission and accelerated approval, when applicable.
This week, Immunomedics reported that treatment with IMMU-132 produced partial response in some heavily pretreated patients with metastatic esophageal and colorectal cancers. In some patients with pancreatic and gastric cancers, the disease was stabilized for extended periods, with time-to-progression exceeding that of last prior therapy in many cases. The treatment was well tolerated with the most seen side effect being transient neutropenia (low number of neutrophils, a type of white blood cell). These latest data support prior findings showing that, amongst other things, treatments with at least one dose of IMMU-132 were reported to produce partial responses and disease stabilization in at least 57% of patients (64 of 113) with diverse, metastatic solid tumors in the Phase 1/2 trial.
Even with the developments, there is still a pretty decent size short interest in IMMU in December, but it was being trimmed as the year wound down. According to data on Nasdaq.com, in the last two weeks of the year, the short position dropped about 7% from 11.4 million to 10.6 million, representing just over 12% of the float, which would take about 16 days to cover based upon average daily trading volumes at that time. Generally speaking, a declining short interest indicates the bears are losing their grip, but with the overall short position remaining large, there remains tall signs of bearish overhang. This relatively underfollowed company has a robust pipeline addressing some serious areas of unmet medical need and with a market capitalization dropping down near $400 million, it will be worth a watch to see what the company can produce in 2015.
This article is a follow-up article to an earlier on breakthroughs in cancer research available at: http://ir.baystreet.ca/article.aspx?id=57.
