Here’s Why This Analyst Is Not Counting Immunomedics, Inc. (IMMU) Out of Approval in mTNBC Despite Disappointing SABCS Abstract

Cowen places more importance on ORR strength than reduction in OS for IMMU's prospects for a green light.


Immunomedics, Inc. (NASDAQ:IMMU) shares were falling 19% yesterday after abstracts surfaced at the yearly San Antonio Breast Cancer Symposium (SABCS), with one abstract particularly disappointing the biotech-verse. The drug maker’s updated clinical data from the Phase II trial of IMMU-132 in relapsed and refractory metastatic triple negative breast cancer (mTNBC) exposed a decrease in overall survival (OS), and now the Street is all riled up.

While Cowen analyst Phil Nadeau grasps there is reason for sharp “disappointment” considering OS as well as duration of response figures both sank from data back in January, he nonetheless continues to be bullish on the cancer drug’s chances as “likely to get accelerated approval.” It is worthy of note that IMMU-132’s “response rate is still well above standard of care,” argues Nadeau, saying that Immunomedics’ response data matters more in the bigger picture.

Therefore, maintaining that the company’s revenue potential for IMMU-132 remains “intact,” the analyst maintains an Outperform rating on IMMU stock with a price target of $15, which implies a 50% upside from where the shares last closed. (To watch Nadeau’s track record, click here)

Nadeau highlights, “IMMU-132’s SABCS abstract in mTNBC showed an ORR of 34% (up from 29% in the prior look), PFS of 5.5 months (previously 6 months) and OS of 12.7 months (previously 18.8 months). While investors are disappointed by the decrease in OS, we believe ORR is most important for accelerated approval. It remains strong, so we continue to think approval on the Ph. II data is likely.”

“The decrease in overall survival from the prior data cut is of a large magnitude, and therefore some disappointment is warranted. Nonetheless, it is important to note that the new overall survival figure is still within the 95% confidence interval of the overall survival data released in the prior cut. With a wide confidence interval the prior overall survival data was quite immature, though this was not well appreciated by investors. That being said, we continue to believe that the response rate data from the Phase II is most important to it securing an accelerated approval,” contends the analyst, asserting: “We continue to believe that IMMU is undervalued for IMMU-132’s potential.”

Wall Street’s initial word on this biotech player goes to the bulls, as according to TipRanks, out of 3 analysts polled in the last 12 months, all 3 are bullish on Immunomedics stock. With a return potential of 40%, the stock’s consensus target price stands at $14.00.