There is a new Pitt Street research report. A$0.25 per share in...

There is a new Pitt Street research report. A$0.25 per share in a base case scenario and A$0.35 per share in an optimistic (bull) case scenario.

"Immuron Ltd (ASX:IMC): Soon to enter the ‘Phase 3 club’

Immuron (ASX:IMC) took a major step forward and attracted significant investor attention on Thursday 7 March 2024. The company revealed interim topline results from its Phase 2 trial in Travelan. The results were positive and bode well for the company to pursue a Phase 3 clinical trial.

Travelan passes with flying colours

The trial found that a single dose of Travelan is effective In prevention of moderate to severe diarrhea following challenge with enterotoxigenic Escherichia coli (ETEC). Specifically, ETEC induced moderate to severe diarrhoea was reduced by 36.4%, protective efficacy against severe ETEC induced diarrhoea was 66.7% and there was a statistically significant 83.3% reduction of subjects needing early antibiotic treatment post-challenge.

Immuron is set to join an exclusive club

Although complete results are not due until later this year, the company will now proceed to hold an end of Phase 2 meeting with the FDA to discuss the pivotal Phase 3 registration strategy as well as explore funding for Phase 3. By merely entering Phase 3, Immuron will be among an exclusive list of ASX biotech stocks in Phase 3. We expect this fact alone to lead to continued growth momentum in the months ahead.Immuron investors have plenty of other catalysts to look forward to including clinical trials with its other assets (which we will outline in this report) and sales growth for Travelan, sold as a general dietary supplement. In the first 8 months of FY23, the company recorded $3.2m in sales, up 168% on the prior corresponding period and well ahead of the $1.8m recorded in the entire 12 months of FY23. This is a testimonial to the strong potential of Immuron’s assets. Immuron also recorded a $2.2m gross profit, a 147% gain from the prior corresponding period.

Valuation range of A$0.25–0.35 per share

We reiterate our valuation of Immuron as first outlined in our initiation report – at A$0.25 per share in a base case scenario and A$0.35 per share in an optimistic (bull) case scenario. Even with the recent re-rate following the results, it is well below the valuation of other ASX companies in Phase 3 and we expect the gap to close in the coming months as the company moves towards Phase 3."