ImmunoCellular Therapeutics Ltd (NYSEMKT:IMUC) is one of the week’s biggest biotech runners, up close to 200% on the Monday open. At a glance, there doesn’t look to be too much we can pin the gains on – there has been no news released by the company, and no new filings with the SEC. It’s a low floater, and we have seen quite a few of these types of low float companies run up on the back of nothing more than a spike in volume. As such, it could be just that – shorts getting squeezed out of a low float on the back of a higher than average number of shares trading hands.
Whatever it is, it’s caught our attention, and we are now asking the question, is there any momentum left in the stock? Let’s take a look.
ImmunoCellular is a biotechnology company focused on developing cancer therapeutics, and with a specific target right now of developing dendritic cell treatments for patients with a type of brain cancer called glioblastoma multiforme (GBM). GBM is the most common, and most aggressive, type of brain cancer in the US and Europe, and right now, it is almost impossible to treat long term. A number of companies are working on developing therapeutics for the condition (another one that we have covered on quite a number of occasions is Northwest Biotherapeutics, Inc (OTCMKTS:NWBO)), but as yet, none have been successful in reaching commercialization by way of an FDA green light.
This company is one of the closest, with its lead asset, ICT-107. The drug is currently under investigation as part of a phase 3 registration trial in a GBM indication, a trial that kicked off at the end of last year, and – if successful – will form the basis of a new drug application (NDA) for the asset with the FDA on completion.
So in the absence of any real news, we’ve got to look at the most recent developments as a potential indicator of sentiment. Back in mid December, the company announced that its CEO was stepping down to make way for one of the company’s board of directors to take the helm. Markets were sort of neutral to this development, and seemingly rightly so. It’s never great when a CEO decides step down, and especially at this late stage of an asset’s development, but that one of the existing team stepped in softens the blow, and that led to the flat market response that we saw mid month in December.
Shortly before the management change announcement, the company reported its third-quarter financials and served up a business update alongside the numbers. As usual at this end of the biotech space, the business update was more important than the numbers, with perhaps one figure the exception – cash on hand. The company sold some warrants in August and raised somewhere in the region of $6 million on the back of this sale, and – according to the latest reports – had $15.3 million cash on hand at the end of September 2016. For a company this size, that’s not too bad. It doesn’t negate the potential for dilution later this year (phase 3 trials are expensive, especially in an aggressive oncology indication) but it does take some of the risk away for shareholders near term, at least. At the time of the update, 66 sites had been activated in the phase 3 GBM trial, and the company noted that it expects to have completed randomization (read: full enrollment and study underway) by the first half of 2019.
On the trial listing at clinicaltrials.gov, the target completion date for the phase 3 is December 2019 as a primary, with December 2021 slated for all out study completion. Readers can check out the listing here. From the numbers then, it looks as though ImmunoCellular is on track with the study.
There is a 30% event interim analysis and a 67% event analysis slated to hit press as and when these targets are met, but these aren’t really near-term catalysts, as chances are they won’t come before late this year for the 30% event target at the earliest.
So, what’s driving the recent action? We have to go back to our low float thesis to answer this question. There really is nothing from an operational perspective that has moved markets, and a low float/short squeeze is the only real suggestion. Sentiment is seemingly pretty positive, but that in itself isn’t enough to drive a 200% run. We are on the lookout for some communication from the company related to the action.
Whatever happens, it shows that this company can move, and with a pretty solid pipeline, a decent cash holding, and such a low float, it might make for an intriguing speculative exposure going forward.
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Disclosure: We have no position in IMUC and have not been compensated for this article.