J.P. Morgan Comments on Immunomedics, Inc. (IMMU) and Seattle Genetics (SGEN) Deal


This morning, Immunomedics, Inc. (NASDAQ:IMMU) and Seattle Genetics, Inc. (NASDAQ:SGEN) announced a in-licensing deal, where Seattle Genetics will acquire the global development and commercial rights to Immunomedics’ breast cancer drug IMMU-132 for $250 million upfront, $1.7 billion in potential milestones, tiered double digit royalties and an equity investment. Until Feb. 19 Immunomedics may continue to negotiate with a limited number of other parties; if a better offer is made, Seattle Genetics may choose to match this offer. Upon declining to match, the terms of the agreement will be terminated.

In reaction, Immunomedics shares jumped 21% to $5.21, while Seattle Genetics shares dropped nearly 4% to $60.14.

J.P. Morgan analyst Cory Kasimov commented, “We believe that IMMU-132 represents an attractive opportunity for SGEN based on its technology and efficacy/safety results to date (it also has Breakthrough Therapy Designation from the FDA). Though we do not expect this development to be immediately thesis changing, we view it as an opportunity for SGEN to potentially diversify its commercial portfolio more quickly than its current pipeline would allow.”

As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes. According to TipRanks, analyst Cory Kasimov has a yearly average return of -9.1% and a 35% success rate. Kasimov is ranked #4298 out of 4395 analysts.

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