The Ides of March
This time last year analysts were predicting a World War, a world wide recession and stock market crashes, with the leading index in the US, the S & P 500, forecast to fall through 3200 points. Centuries earlier Julius Caesar had prophecized “Beware the Ides of March”, and soothsayers in 2022 were heeding the call, well and truly. Putin’s unholy invasion and murder of innocent Ukrainians was tightening the supply of food and oil throughout Europe, exacerbating already existent supply chain issues as the world stumbled out of COVID. One of the world’s leading suppliers China was itself in and out of COVID, tightening the grip on supply, sending the price of goods and services up even further. In the midst of rampant inflation consumers, themselves waking up from COVID, were ready to spend their government money and in doing so increased demand for goods at a time when supply for them was at its weakest. On the macroeconomic front things appeared bleak for both Europe and the US.
The world wide war thankfully did not eventuate. Having lost billions in Vietnam, Iraq and Afghanistan, the US were reticent to send troops to Ukraine, settling for sending money and artillery instead. They reverted to the isolationist policy exercised prior to WW1 and WW2, where it took a major international incident to draw them in. In 1914 Archduke Franz Ferdinand’s assassination ignited WW1 and a year later the sinking of the Lusitania led to US engagement. Whilst it took the bombing of Pearl harbour on December 7, 1941, for the US to engage, years after the commencement of WW2. In 2022 there was to be no such catalyst, although an errant missile from the Russia Ukrainian War finding its way into Poland almost provided such a disaster. A world wide recession did not eventuate either, as the US consumer remained resilient at a time when employment remained strong. The US Federal Reserve began stemming the tide of inflation through ongoing interest rate increases, suppressing demand at a time when the supply of goods and services slowly started to ratchet back up. China proceeded to open back up post COVID as did shipping routes and international ports, alleviating many of the supply chain issues existent during COVID. Bring on March 2023, where despite the financial constraints imposed through excessive rate hikes, the S&P closed the month out at well over 4,000 points. The doom and gloom anticipated this time last year had not come to fruition.
Meanwhile Imugene (IMU -ASX) was suffering from her own conflict. Irrespective of positive announcements and fundamental improvements the share price was flailing. Investors were baying for management blood as the company's lack of PR and communication drive was starting to irritate if not irk many shareholders, who were losing hundreds if not thousands of dollars in share price value by the day. Things did improve sporadically in June 2022 with the announcement of encouraging overall survival rates for their leading B cell candidate Her Vaxx. However before long the selling continued as revenue expectations dissipated, leaving investors thinking a commercial outcome was further away than they had initially thought. To be fair Imugene’s management had always stated they were never taking their drugs to market, that an out licensing deal following the creation of compelling scientific data was their modus operandi, yet investors demanded commercial realities. Having thought the Her Vaxx results were strong enough to command a sale, many were bemused with the company’s decision to commence yet another Phase 2 Her Vaxx trial, as opposed to the licensing deal they had envisioned. When nothing commercial came to pass the shorter's took hold again and the rest is history, with the stock closing out February at only a fraction of its late 2021 value.
Though March 2023 brought with it not only a turnaround in international markets, it brought with it an international flavour for IMU investors, who were treated to a series of shareholder roadshows, presented by none other than the esteemed Dr. Jakob Dupont in concert with world renowned surgeon and leading cancer researcher Professor Yuman Fong, from the much heralded City of Hope Cancer Research facility in California. Dr Dupont, having 10 FDA drug approvals under his belt, is well equipped to do what many before him have failed to do, ensure drugs make it to market. Whilst Professor Fong, having worked for decades on finding a cure for cancer, was keen to let investors know his revolutionary oncolytic viruses (OV) were positioned to treat not one cancer, but all manner of cancers. He noted his most powerful OV Vaxinia may be administered in up to 10 different cancer lines in its current Phase 1 MAST Trial for 100 patients, with a view to seeking ultimate FDA approval for all solid tumour cancer types. If Vaxinia was deemed safe and efficacious in treating 10 different cancer designations, then it could be deemed safe and efficacious when treating all solid tumour cancer lines. IMU CEO and Managing Director Leslie Chong, herself having seen 4 drugs through the FDA approval process not only reiterated the company’s desire to seek FDA approval for CF33, Vaxinia and Oncarlytics, she insinuated it may happen sooner rather than later, given the reams of positive data amassed to date in the concurrent CF33 CHECK VACC and Vaxinia Trials.
All of a sudden the possible amount of revenue on offer for Imugene’s transformative medical products started to sky rocket. Professor Fong’s affirmation that CF33 and Vaxinia were in fact working as planned opened the door to potential product sales in the as of now untapped massive solid tumour market, where a forecast revenue of over 500 BN USD by 2030 was in play. Could this really be happening, many thought, as they sat listening to Professor Fong state everything he had seen in trials with animals, he was seeing in human trials. This is unbelievable they then thought, as they sat digesting their lunch and more importantly the news that Professor Fong was seeing unequivocal evidence his viruses were killing cancer in humans. Perhaps one day his products would become human therapy, as he noted late last year on late night US TV.
Yet although difficult to believe, there was more to come. Was the Easter Bunny coming twice this year? In the background of Professor Fong’s success was a push by US President Joe Biden, himself having lost a son to cancer, to cure cancer on his watch. Having launched the so called Cancer Moonshot Project, Congress had not only granted millions of dollars to finding a cure, they had armed the FDA with the authority and power to launch cancer drugs after Phase 1 clinical trials, if (in short) the drugs were deemed to be both safe and of significant value to cancer patients. The FDA pathway for fast track approval was available for Breakthrough Therapies to expedite the development and review of drugs intended to treat a serious condition, where preliminary clinical evidence indicates the drug may demonstrate substantial improvement over available therapy on a clinically significant endpoint(s). On March 22 at the NWR Healthcare Conference Imugene CEO and Managing Director Leslie Chong drew even further excitement when assuring investors Professor Fongs viruses would definitely be in line for fast track approval, given the data being collated and assessed during existing OV Phase 1 clinical trials.
Imugene was no longer looking like the company without revenue for years to come. Prospective revenue streams were closer and closer in the headlights of current shareholders, who themselves started to evaluate the likely sale or out licensing deal of the company’s CF33, Vaxinia and Oncarlytics treatment arms. There was light at the end of the tunnel. The selling started to dry up and buying of the stock was back on the agenda, as the end of March and commencement of a new quarter awaited them. But would the company be able to realise the full potential of such a mammoth deal? Would Big Pharma enter a bidding war for a seat at Professor Fong’s table as they had done during the recent acquisition of the US cancer company Seagen? And when would Professor Fong’s results be made available to the market in general? Could institutions wait for these trial results to come to hand prior to pulling the trigger, or would they indeed miss out this time around? Were international institutions even aware of Professor Fong’s current achievements, or would it take a NASDAQ listing to ignite their flame? Imugene CEO Paul Hopper was remaining tight lipped during the aforementioned March Investor Roadshows. He, as always, was letting the science do the talking, and talking it was. As a leading IMU shareholder himself, existing IMU shareholder grievances whilst of concern, must have been water off a ducks back to him, as he sat visualising the pot of gold at the end of the rainbow. “It’s not our job to sell you shares in our company” he noted to the Sydney audience, though in the same breath he was doing just that. For anyone of a sane mind in the audience that day would have left with a view to buy as many IMU shares as was financially and physically possible, having listened to the excitement in Dr Dupont and Professor Fong’s voices.
So where does that leave Imugene now? Surely patients and oncologists accepting Vaxinia in both IT and IV format at higher dosage rates must hold the key to the company’s future success. But if Professor Fong is any guide, they are set to see positive results in the treatment of their life threatening solid tumours. If that is indeed the case then in my opinion Imugene is well on the way to become one of the most successful biotech company’s in the history. Professor Fong would therein be in line for a Nobel Prize and Chairman Paul Hopper close behind as recognition for the clinical and commercial development of this transformative medicine. Anyone with shares in IMU who has taken the time out to research the company is clearly not selling at this point in time, as they are aware of the significant financial benefits coming their way when Professor Fong’s results are published. They have now come to the realisation the previous share price highs of 60 cents are set to become a sideshow. The solid tumour market size is immense and no-one is knocking on the FDA door with breakthrough therapies in the way Imugene is, given recent acknowledgement of success in their oncolytic virus trials. Whether the market awakens from a slumber in respect of IMU, as the world did post COVID, is irrelevant for many long term holders. For irrespective of world conflict, world markets, and the price of the S&P 500 in the US, they, like their Chairman before them, can visualise the pot of gold at the end of the rainbow. A pot of gold that has now become a whole lot larger, and most importantly for the share price, a whole lot closer.
DYOR - Seek investment advice as and when required - Opinions only
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