Allogene Therapeutics, Imugene and responses to my post of 27 January
The comments on my post yesterday are most appreciated. Yes @Harry58 I do note Oncarlytics initial success was based on pre clinical trials, as was Vaxinia’s. I must admit I thought everyone on these threads would have known that as it was only in late 2022 that it was announced, and OASIS is a Phase 1 Trial. But thank you for clarifying either way. No @maplelegion 10 to 20 million is not billion, it is indeed million. I was making the point that given many small biotech companies conducting research are often valued at around the tens of millions mark, Imugene’s market cap is often seen as relatively high, by those who are unfamiliar with valuations in the field of immunotherapy. By those who are of the ill informed opinion that pre revenue stocks in the world of biotech are not worth much. But yes, if successful you can probably add a few tens of billions to the company’s ultimate price tag. @Outofbounds2 I appreciate your comments and I too would enjoy seeing Imugene grow to put themselves in a position where they can treat patients with their own drugs, for those most in need. Unfortunately however I cannot see that happening, given the value of their offering.
Thank you to for your post @Fibber. In response I don’t think Allogene’s move to reprioritise their portfolio is a bad move, nor shall the company be seen as a bad investment by Pfizer. Analysts in the US view the situation similar to me. The average price target for Allogene Therapeutics Inc is $11.88. This is based on 12 Wall Streets Analysts 12-month price targets, issued in the past 3 months. The highest analyst price target is $35.00 ,the lowest forecast is $4.50. The average price target represents 268.94% Increase from the price when analysed of $3.22. That would bring the value of Allogene in at a market capitalisation approaching $1.5 billion USD. It’s interesting is it not, if it reaches that prices in the next 12 months it shall be worth close to 3 times that of Imugene, for a suite of allogeneic therapies alone. Imugene has an allogeneic therapy in Azer Cel, but 3 other distinct product platforms as well. One may well ask, why is Imugene valued at such low multiples all the time compared to its direct NASDAQ competitors such as Allogene and Replimune, who specialise in specific market segments alone i.e., oncolytic viruses or allogeneic therapies alone?
I have discussed Allogene before, as late as yesterday when I noted the founders crossed over from Kite Pharma where they had success with the autologous CAR T Yescarta. They were in many ways seen as some of the pioneers in the CAR T field, and as such brought with them a wealth of experience, not to mention big time reputations, a fact that clearly did not go unnoticed by Pfizer. With the support of Pfizer they have been able to license 16 pre-clinical chimeric antigen receptor (CAR)-T cell therapy assets from Pfizer, which it in turn had licensed from Cellectis. This deepens their product arsenal in addition to their cash reserves, which they require, as they have a much heavier cash burn than Imugene (IMU - ASX), at over $80 billion USD pa. Allogene employ hundreds of staff and are planning on conducting a Phase 3 Trial into over 230 patients with Large B cell Lymphoma, and this all costs money. But I guess the outcome could mean that by as early as 2025 they may become an alternative treatment path for patients who have relapsed from chemo, steroids and other drugs, in that indication, of which there are many. IMO Allogene is sure to be an ultimate winner for Pfizer due to their ability to continue exploring the cutting edge of allogeneic therapies, through the creation of “off the shelf“ products with the capacity to reach far more patients at scale than existing treatment arms. Their alliances with leading diagnostic firms in the US enable them to identify patients who may still have cancer cells in their body following treatment, and as such move toward treating them in order to eradicate their cancer moving forward.
Is Allogene that different to Azer Cel and Imugene you may well ask? Why is Allogene and their allogeneic therapies worth so much more worth so much more than Azer Cel? Perhaps this may have something to do with what @Odds&Evens was referring to in their post yesterday, regarding whether or not Imugene should contract leading US advisers. A quick search on Fintel of Allogene’s share ownership highlights just how massive their institutional shareholder base is, as opposed to that of Imugene (IMU - ASX). Allogene Therapeutics, Inc. (US:ALLO) has 384 institutional owners and shareholders holding a total of 140,991,453 shares. The largest shareholders include Fmr Llc, Tpg Gp A, Llc, Vanguard Group Inc, BlackRock Inc., State Street Corp, Jpmorgan Chase & Co, XBI - SPDR(R) S&P(R) Biotech ETF, Woodline Partners LP, Primecap Management Co/ca/, and EcoR1 Capital, LLC Since the JP Morgan Conference Fidelity Management, Blackrock, Vanguard and JP Morgan have all increased their shares by large amounts. I would note that aside from encouraging large institutional holdings through clear and concise presentations of their “healthy donor,” ”off the shelf” mantra, Allogene’s founders in Arie Belldegrun and David Chang are known in biotech circles as not only pioneers, but successful. And as we know in business money follows money. Unlike Imugene whose founders initial medicine was ultimately scrapped by Merck (through no fault of his own I might add), their Kite Pharma products have been seen as very successful, with Yescarta being viewed by many as a leader in the CAR T field along with Kymriah. Remember as noted by me yesterday Gilead paid $11.9 billion USD for Kite Pharma and Yescarta, that’s a healthy chunk of change. Though perhaps more importantly they are perceived as collaborators, prepared to work with whomever on the cutting edge to bring their products to market in an innovative manner. Whilst finally the market can see Pfizer as somewhat of a big brother to Allogene, standing in the background with 25% ownership. This places Pfizer in an ideal position to take on more of Allogene if and when they see fit. Unfortunately IMO in my opinion Imugene may have failed by not to securing similar partnerships with Big Pharma in each or any of their product lines.
It’s interesting, all the talk on these threads to me makes little sense, and to my way of thinking Replimune and Allogene are prime examples. People here often say, “Oh Big Pharma need to see such and such before they take a position,” or “Imugene doesn’t need high profile biotech Board Members to attract investment,” or “Why list on the Nasdaq, we are not big enough and there is little advantage in doing so”. These opinions make little or no sense to me at all. Pfizer invested in Allogene before they had practically anything. They weren’t sitting back and waiting for Phase 2 or Phase 3 results from Allogene. They followed experienced US directors and backed them in. Their backing empowered the Allogene directors to raise hundreds of millions of dollars and employ a huge scientific team with hundreds of support staff to boot. To then conduct clinical trials with hundreds of patients. Keep in mind the company was formed less than 5 years ago, Imugene was formed over a decade ago. Perhaps many here need to rethink their own rationale prior to commenting on the need for this and that when it comes to investing in Imugene. If Big Pharma like what they see, as Pfizer did when Allogene was but a pup, they are going to step up, no matter where in the biotech cycle the company sits. Trust me, they don't amass billions of dollars each year by sitting on the sidelines waiting for things to happen, they make them happen. Pre revenue or not, cash burn or no cash burn, early stage results or not, Gilead, Novartis, BMS and Pfizer, too name but a few, have all opened their cheque books prior to FDA approvals, resounding results and revenue.
Look by highlighting the developments, experience and cutting edge technology at Allogene, I am in no way wishing to detract from the progress made by Team Imugene. Imugene as their CEO and Managing Director noted in her recent Proactive Investor interview highlighted by @Taureanbull yesterday are not too far away from a registrational trial for their very own Azer Cel technology in the diffuse B cell lymphoma cancer indication, with the ongoing assistance of the FDA. This cancer indication by the way is similar to the market being pursued by Allogene themselves. Close to 18,000 patients diagnosed with the illness each year. Like Allogene’s therapies Azer Cel, according to Imugene’s scientific team headed by Dr Paul Woodard, may have the potential to prove successful in treating patients who have relapsed from autologous CAR T and other treatments. Of note is that aside from a current focus on allogeneic therapies Imugene are exploring the prospect of combining Azer cel with their other treatment arms, those being CF33, Oncarlytics and Vaxinia. In short Imugene have a bit on their plate, with less cash than some of their US counterparts to work with. Therefore they need to prioritise themselves, as they are currently doing wth their Vaxinia (MAST) Trial. Is Imugene going to amass as much data as that of Allogene? Clearly not, as they are trialling with less than half the participants. That said the quality of Imugene’s data may just be enough to keep a flame burning with the FDA, the ultimate convener of all things biotech in the US.
And finally thank you too to @Texie1 for your kind words. I hope you appreciate this post as well. But I must admit I’ve written it in about 20 minutes flat off the cuff so there’s bound to be one or two typo's and anomalies. No doubt my ever enthusiastic team of trollers shall seek them out and let me know.
Have an enjoyable Sunday. I’m up for scrambled eggs apparently and then walking a few dogs.
DYOR Seek investment advice as and when required Opinions only
P.s Apologies if I don't have time to respond to further comments this week...
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