stock update

Imugene (IMU: 30 cents) is a developer of vaccines to treat production animals including chickens and pigs. To date, the company has outlicensed one vaccine product to Merial, and has several more in evelopment. Thse include an avian influenza vaccine and a cocciodiosis vaccine (both for poultry), and two
vaccines to treat pig diseases.
Progress with the avian influenza vaccine has been positive, with direct injection into chicken eggs generating a 100% protection if followed by a booster seven days later. A single dose into the egg achieves an 82% coverage or response. The company hopes that
with some modest tweaking it can increase the benefit from single dose direct injection into the egg. The company is also stepping up development so that it can offer vaccines to treat H5, H7 and H9 variants of the influenza strains.
(Vaccination by direct injection into the egg is a commercially significant enough technology for Pfizer to buy Embrex, a developer of egg vaccination technology, earlier this year for US$155
million.)
The companys PRRS (porcine respiratory and reproductive syndrome) vaccine is set to commence trials in June in the US. Two doses will be evalauted in this study and the vaccine will be given by injection. There is no vaccine available for this disease, which
means the company does have to acheive 100% efficacy, with 55% 60% a favorable outcome. Vaccines for pigs command higher prices relative to poultry industry vaccines so this vaccine trial should be watched closely. According to the company, this disease costs the industry US$600 million a year in lost production.
Imugune is capitalised at $39 million and held $1.4 million in cash as of March 31, 2007. The company has 4.2 million 22 cent October 2007 options outstanding, which gives the company a useful funding option if its shares stay in the money.
Imugene is a company that investors should monitor because success with at least one animal health vaccine may see the company become an attractive acuisition target by one of the large global animal health firms, such as Pfizer, Schering or Merial.

Bioshares recommendations:

Speculative Buy Class A
Imugene