Imugene and the “Tug of War”
Imugene shareholders are aware of the unique science in play at the company, that’s ostensibly why they bought in the first place. Now the onus is on company management to deliver on not only the science, but on the commercial promise of their innovative products. At present there appears to be a “tug of war” evolving between on the one hand shareholders who seek business and financial direction in what is a competitive landscape, and on the other company management who continue to follow and pursue the science at the expense of all else. As last years company AGM exemplified the tide is turning, and unless the Board at Imugene clarify how when and where value is to be created for shareholders in a clear and concise manner, other than from a scientific perspective, the shareholders may well go in search of a Board who can. Adding shareholder value is and has always been where it begins and ends in the corporate world, and never the twain shall meet. At the same time many within the Imugene supporter network believe the company’s revolutionary oncolytic viral therapies are going to come to the Board’s rescue in achieving outstanding clinical results, and in doing so head the off posse at the turn, providing immeasurable shareholder value for all to see.
Personal experiences, corporate life and creating value for shareholders
When I started work as an economics graduate the boss called me into his office at the top floor of a prominent Collins Street Building and sat me down. He asked if I knew why he had chosen me for the position. I did not reply. He then proceeded to inform me it was largely due to the private school I had attended. Before long I was handed over accounts for some of the leading corporate exec’s of the day including Hugh Morgan (WMC) and John Elliot (CUB), whose collective interests at the time reached far and wide, as did many of my clients back in the day. I began to catch onto the fact that although corporate life was professional to say the least, there were those who had a leg up, and if you paid your respects, didn’t talk out of turn and spoke the right language, you could soon position yourself for success. In short corporate Australia, and indeed disallowed, was a bit of an old boys club. That said despite my financial services division yielding a return of 15% per annum that year, a directive from our company headquarters in the US came through stating our bonus was to be 2% plus CPI. “The directors are delivering adequate returns to shareholders in light of what are uncertain economic times”, was word from above. I realised pretty quickly that shareholders came first and employees second, when it came to the food chain pecking order in corporate life.
Likewise in my second job for a leading Australian bank, where I not only looked after wealthy clients, but day to day customers as well. I’ll never forget transferring a few new customers from their Passbook Saving accounts into a then AAA rated mortgage trust with the bank. Upon doing so the banks customers were netting up to four times their previous monthly earnings. As such I must admit to being somewhat surprised when later that week the Bank Manager sat me down and said “What are you doing? Do you know how much the bank earns from those Passbook Savings accounts?” He asked. I thought to myself well I’m only protecting your customer base, without wanting to say anything, given he was clearly on a mission. “Even if we lost a few of these customers, we would still be better off with their money in those Passbook Savers”, he said rather angrily now. “Only promote your financial service products if they specifically ask for them,” he said. “We pay our shareholders good dividends here at this bank, and never forget they come first,” he said. So before too long I came to the realisation, or should say the understanding, that in spite of how well I or my team performed, that irrespective of how good our products were, corporate life was all about the shareholders.In essence it was all about creating value for company shareholders. That is how the big cats held their jobs, by not only playing the game with the boys, but by making sure they looked after the boys, at the expense of employees, customers and whomever else raised their head in the process.
Shareholders are often aggrieved if in fact the share price of the stock in which they have invested falls, or in circumstances when company dividends are cut or reduced. Hours are spent at the Gentleman's Club analysing what or indeed who is to blame. They don’t initially send out a search party looking for someone to lynch if there is a reason for the fall, particularly in circumstances where there has been perceived value created by the company’s Board of Directors. That said acceptance by shareholders of an increase in the intrinsic or perceived value of a stock only lasts so long, especially if the share price continues to flounder. Irrespective of market sentiment, macro economic conditions or even industry set backs, the only thing the boys want see falling is their golf handicap.
Imugene - Science vs Business
In the IMU case shareholders have bought the science and continued to show faith in the company's strategy, that being to establish compelling science that is in demand, cutting edge technology, worth a potential bomb when acquired by a big pharmaceutical company at some stage down the track. They have attended respective company roadshows, continued to exercise majority support for the Board of Directors at Annual General Meetings, and agreed to two capital raises in just under two years. The shareholders have played the game, up until now that is. Though now one could suggest there is an undercurrent permeating throughout the disgruntled shareholder ranks, a contingent growing ever so slowly by the day. Support for management is still present, as is a belief in the science being pursued by the company’s team of experts. However some shareholders are starting to realise that when it comes to the science, the science and anything but the science card, Imugene isn’t playing the corporate game. For in the eyes of many there is only one card in their pack, that being the science card. Indeed some are suggesting they aren’t putting shareholders needs and wants first. Business, commercial and financial strategies and outcomes are constantly placed on the back burner they say, petering out in the wake of yet another scientific discussion, revelation or symposium. Given many prospective investors and shareholders fail to adequately comprehend and grasp the science, a search for financial outcomes in their eyes, becomes even more blurred.
Imugene shareholders and “the need to know more camp”
Are Imugene ignoring shareholders? Definitely not, as recent attempts to increase their brand exposure through enhanced investor and public relations would attest. Videos featuring their personnel and achievements in addition to their staff, illustrate a company desire to be inclusive. Though the thrust of these and other company initiatives to the naked eye would appear yet more to do with Imugene’s science, as opposed to their business and financial strategies. In instances where Imugene’s business and financial decisions have come to the fore, such as in the two capital raises outlined above, the company management has tended not to show their hand. Rather than announcing the capital raise participants together with the specific need and purpose for the funding, they have tended to remain somewhat tight lipped.
I am of the opinion the company’s science is in good hands under the experienced supervision of their leader, CEO and Managing Director Leslie Chong. Nevertheless I must admit to being rather non plussed about the business and financial arm of the Imugene team. Having heard little if anything about commercial relationships, supply agreements and the potential financial outcomes of these, I too am moving into the “need to know more camp”. In late 2021 when the share price rallied following on from excellent B cell clinical trial results, combined with the hint a prospective deal was in the offing, everyone was on cloud 9. Subsequently in early 2022 after a significant fall in price, shareholder spirits were buoyed once again as Imugene’s leading B cell candidate Her Vaxx brought home outstanding overall survival rates over and above the standard of care, chemotherapy. Was a deal now in the making? Once again when a commercial relationship failed to materialise shareholders felt more pain as the share price continued to move south once again later in the year. Indeed many shareholders began to ask, “Where were the financial cavalry when we needed them?”
Patient capital and Lesley Chong
Biotech capital is patient capital, as alluded to by Imugene CEO Paul Hopper. Resilience, stamina and tenacity are required to weather prevailing headwinds, as the biotech world falls in and out of favour, along with the majority of stocks therein. Though it goes without saying for the lucky few who make it through from bench to bedside the rewards are more often than not immense in the field of biotechnology. Imugene may well be placed in the lucky category, due not only to the fact they have acquired remarkable oncolytic viral therapies, in addition to their B cell suite of immunotherapies, but due to the fact they have employed the staff to make it happen. Personnel such as Dr Jakob Dupont, with a track record of succeeding in the product approval stage of the game, don’t come around too often. Credit must go to Leslie Chong for not only bringing these professional medical practitioners and scientists on board, but for enabling them to express themselves through their passion and work, without herself feeling defensive, insecure or threatened by their presence. Good leaders are said to surround themselves with intelligent people who have runs on the board, and Leslie has definitely done this in recent years.
It’s now time for Team Imugene to start hitting a few more runs. The Ashes start mid June and many of us are looking forward to the Imugene tally rising over and above the 62 she scored last time we travelled to the UK, in 2021. If Vaxinia stands in for Warner we may well be in the running.
Vaxinia, the FDA and forthcoming results
They say the time to buy is when everyone is selling. Recently despite significant fundamental steps forward such as their Oncarlytics FDA Approval, there has been no substantial upward movement in the company's share price. However I would draw investors attention to the fact Professor Yuman Fong stated but 2 to 3 months ago in Sydney the supervisors in the Vaxinia Trial were close to administering the optimal biological dose rate in Imugene’s current MAST Trial for patients with advanced solid tumours. Given we have already heard of positive results at lower dosage rates, the prospects for those on the existing clinical trial appear bright. If indeed there are some complete responses in this trial as has been insinuated by some on these threads, the whole share price cycle turns on its head. For deal or no deal, partnership or no partnership, if you start tackling solid tumors head on and succeed, you are in the money. As imugene continues to wade into oversold territory I myself feel more optimistic than ever the company is close to succeeding in meeting a huge unmet need. From all accounts their life changing medicine aimed at killing ones cancer cells and strengthening their healthy ones, is working. With this in mind I do feel confident Imugene’s oncolytic viruses can receive fast track approval from the FDA. Most noticeably the company has not put a foot wrong from a medical and safety perspective. As another tick of approval from the FDA and US regulators Imugene’s vaccines and viruses are proving to be both affordable, cost effective and as such well within the the reach of the everyday cancer patient.
Share price machinations and down town Tassie
When it comes to the current IMU share price I wouldn’t suggest many investors are “buying the dip”, I would however be of the opinion someone is accumulating the stock, given the narrow trading range constraining the share price on a weekly basis. As individuals sell into the accumulators trading basket fear tends to overcome rational thought process. Keep in mind stocks tend to fall when a company’s fundamentals falter, yet in Imugene’s situation this is far from the reality. The company continues to grow fundamentally, as exemplified by their wave of price sensitive clinical trial announcements over the past 12 to 18 months. Share price movements are more often than not governed by expectations, and should the Vaxinia Trial yield yet another positive announcement in the coming weeks, that in my opinion may provide the catalyst for another upward cycle in the price of IMU. But then again that’s only my expectation, whatever you do continue researching and stick to your own expectations. That way when you post on these threads you can be true to yourself, as opposed to someone who makes something up for the sake of it. You and I both are becoming somewhat tired of those posts. And whatever you do keep smiling, win, lose or draw Imugene is working toward a cure for one of the worlds deadliest diseases, that being cancer.
Whilst as shareholders we are soon to be close up and personal once again with some of the industry's leading players, Yuman Fong and Saul Priceman, in down town Tassie no less. Word has it Imugene’s leader of business Monil Shah is set to grace the stage. I for one shall be waiting with bated breath for what he has to say. Putting a face to the company's business ideologue is definitely a step in the right direction. Hopefully keepIng investors abreast of what lies ahead with respect to the company's strategic plans is on the agenda. After all, it’s never too late to call in the cavalry….
Enjoy your evening WMHB
DYOR Seek investment advice as and when required Opinions only