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Here's Why Now Is A Great Time To Get Into Immunomedics Inc (NASDAQ:IMMU)

Here's Why Now Is A Great Time To Get Into Immunomedics Inc (NASDAQ:IMMU)
Written by
Chris Sandburg
Published on
August 23, 2017
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Immunomedics Inc (NASDAQ:IMMU) is up close to 20% over the last couple of days and a little over 25% on the last three months. The company has had a busy 2017 so far, with inputs of both the bullish and bearish persuasion inducing volatility throughout the period, but the latter half of the year looks set to put the bulls very much in control and build on the recent momentum to push Immunomedics higher.When we first highlighted this one, back in March, the stock went for a little over five dollars apiece. Fast forward to the most recent close at $9.47 and we are looking at a close to 90% uptick. So why do we think there is further upside on the cards?The answer is relatively simple.The action we have seen recently has derived from a combination of a positive outcome in a license litigation (which got the company moving a couple of months back) and, more recently, some data from a study involving Immunomedics' secondary pipeline asset – a drug called IMMU-130.We are going to take a closer look at this drug in a moment but, in order to address the initial question first, none of the most recent action is rooted in developments associated with the company's lead asset program. We now know that Immunomedics is going to go it alone with this program (well, as things stand) and this means that any progress towards commercialization (we are looking at you, phase 3 trial) should bring with it a degree of upside revaluation on release.Getting back to the recent move, then, and as mentioned, it is rooted in the IMMU-130 asset that Immunomedics is currently testing as a potential therapy for heavily-pretreated patients with metastatic colorectal cancer (mCRC). Across its pipeline, this heavily pretreated population is a common theme for Immunomedics – basically, these patients have exhausted all available options from a standard of care (SOC) perspective and Immunomedics is attempting to bring them an option where one right now doesn't exist. It's a strong approach and gallant at that, but it makes for tough development programs.Tough, but far from insurmountable, as the latest release has shown.As per the just reported data, Immunomedics has been able to demonstrate that IMMU-130 can add meaningful time (both from an overall survival (OS) and a progression free survival (PFS) perspective) to the lives of patients suffering from mCRC and that it can do so with a relatively squeaky clean safety and tolerability profile. In the trial, which was a phase 2, patients that received a lower dose of the drug recorded an interim median PFS of 4.6 months and median OS of 7.5 months. Patients that received a higher dose of the drug recorded these figures at 3.6 and 6.4 respectively.The trial also identified a subgroup of patients, those that had received prior regorafenib (a standard of care second line treatment) therapy, which responded particularly well across both doses.So what is next?The point of this phase 2 was to inform protocol heading into a phase 3 investigation that, in turn, will underpin a registration application for the drug with the FDA in the US. That the numbers have now hit press, and that they are very positive, suggests we should see a pivotal initiation at some point during the coming quarters. Said initiation is a major near-term catalyst and, looking forward, if the trial concludes in line with the outcome of the just reported data, Immunomedics is going to appreciate well above and beyond the levels to which we have seen the company rise over the last couple of months.Keep in mind that the returning of the lead asset license to the company, something we reported on as it happened here, is going to necessitate a cash infusion in order to get a phase 3 completed. With that said, however, management reported recently that cash balance as of June 30 came in at $159 million, which serves up a runway through at least September next year.In other words, the company can afford to start the trial but will likely need a bit of a boost to finish it.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on IMMU, sign up below!Image courtesy of Ed Uthman via FlickrDisclosure: We have no position in IMMU and have not been compensated for this article.

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