Why IMU is a multi multi bagger, page-11484

Last week the Wall Street Journal (WSJ) in their article entitled“Pfizer, Novartis, Merck Executives Say They Are Hunting for Deals Again”, noted biotech acquisitions were back on the table in 2023. In the article Merck CEO Rob Davis is quoted as saying “We do have a portfolio of opportunities we are continuing to look at, when the science and the value align, we will act.” Merck are currently trialling their Keytruda drug in combination with Imugene’s Her Vaxx and Vaxinia. Both companies have leading shareholders, Blackrock, Vanguard and State Street in common. Whilst Imugene’s CEO Paul Hopper has a history with Merck, having sold one of his previous entities Viralytics, to the pharmaceutical giant. The WSJ article makes two salient points with respect to Merck’s future. Firstly that the company is facing a potentially major drop in revenue if its top-selling cancer treatment, Keytruda, which totalled roughly $21 billion in global sales last year, loses U.S. patent protection in 2028 as expected. Secondly, that Merck will be active in deal making in 2023, looking to diversify its business, with a focus in its main areas of cancer, heart, immune and neurological diseases as well as in vaccines, according to their Chief Executive Officer Davis.

Another company collaborating with Imugene is Pfizer, set to combine the drug they own in partnership with Merck Germany, Avelumab with Imugene’s Her Vaxx. The WSJ article discusses Pfizer and the fact they have set a goal of adding $25 billion in revenue by 2030 from business-development moves including acquisitions. This is eminently achievable given Pfizer currently has $36 billion in cash from sales of Covid-19 vaccines, drugs and other products. Like Merck, Pfizer is facing revenue shortfalls in years to come with an estimated drop of roughly $17 billion in sales from patent expirations. What makes Imugene’s drugs attractive to Merck and Pfizer is the long patent lives of Imugene’s vaccines, and their ability to combine with the Big Pharma’s existing drugs to potentially reduce side effects and produce additional efficacy. Perhaps even more attractive to Big Pharmaceuticals such as Merck, Pfizer and Roche is the fact Imugene’s drugs are relatively inexpensive to manufacture, as alluded to by Imugene CEO and Managing Director Leslie Chong recently in a presentation at the JP Morgan Healthcare Conference in the US. US regulators , Congress and public welfare bodies have been advocating for lower cancer treatment costs for some time now, with many existing cancer drugs being cost prohibitive and out of reach for many US citizens. The potential for Imugene’s drugs such as Her Vaxx and Vaxinia to be mass produced at much lower manufacturing costs is appealing to Big Pharma as is the reduced hours of in hospital treatment required in administering Imugene’s vaccines.

Outside of Imugene’s B cell vaccines including Her Vaxx and PD1 Vaxx, and their oncolytic viruses CF33 and Vaxinia, their Oncarlytics arm may be attractive to another Big Pharma company seeking to acquire in 2023, Abbie V. AbbVie CEO Richard Gonzalez, is noted as saying in the aforementioned WSJ article that his company has the capacity to make acquisitions if it finds drugs that fit and are of interest. Keep in mind in February 2021 AbbVie and Caribou Biosciences Announced a Collaboration and License Agreement for CAR-T Cell Products. I am confident when Imugene’s Oncarlytics treatment arm receives FDA Approval as anticipated during 2023, the Imugene platform is sure to be on the radar of multiple Car T suitors, including Abbie V. The potential to out license tImugene’s Oncarlytics treatment program would no doubt appeal to Novartis and Amgen, in addition to Abbie V, Merck and Pfizer, as the Big Pharma’s look to gain market penetration and sure up long term revenue from 2030 on. Oncarlytics offers each of theses biotech Goliaths with the opportunity to gain traction in the lucrative solid tumour market, the holy grail of cancer treatment.

So what does this all mean for Imugene and the IMU share price? In my opinion the stock is definitely being closely watched by many leading players and has been for some time. The recent Her Vaxx presentation and Vaxinia trial announcement have clearly put a floor in the IMU share price, though this level of renewed M&A activity could soon put a rocket under it, particularly if one or two big pharmaceuticals have their sites set on Imugene. Another Big Pharma Roche, may even put their hat in the ring, as they are soon to commence a combination trial with Imugene’s stellar B cell vaccine PD1 Vaxx. Either way, irrespective of whether a potential bidding war commences now or later in 2023, as we move into March there is sure to be further news on the CF33 TNBC trial, given it has now been running for close to 18 months. Whilst Merck’s combination trials with Her Vaxx and Vaxinia are due for results throughout 2023.

In conclusion I am anticipating strong interest in IMU in the coming weeks and months. With a future Nasdaq listing and multiple Oncarlytics out licensing deals all on the cards its looking like the ideal time to be Long in Dodge. Ernst & Young estimated that by the end of last year, life-sciences companies had more than $1.4 trillion in cash and other capital they could use for deal making, up 11% from the previous year. That’s definitely enough money to splash around on Imugene’s innovative new technologies capable of yielding safety and efficacy in the clinic. Not to mention lower costs, reduced hospital time and less side effects for cancer patients. Let’s see how this week pans out.

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The full Wall Street Journal Article commented on in this post can be read at https://www.wsj.com/articles/pfizer-novartis-merck-executives-say-they-are-hunting-for-deals-again-11675907783?mod=Searchresults_pos1&page=1