Sunday musings, by WMHB
This time last year meteorologists were speaking of a continued La Niña, now they’re talking El Niño. Economists were speaking of a massive US recession, now they’re speaking of GDP growth. Financial analysts were talking of the S&P hitting 3,300, now they’re speaking of it possibly hitting 5,000. So often when it comes to outcomes, the commentators often get it wrong. Perhaps it’s simply the fact they are chasing headlines, wishing to sensationalise in search of eye catching stories, in a saturated media space.
Pedalling your way through the rubbish, innuendo and mind games falling under the media umbrella in 2023 can prove challenging. Particularly when it comes to the economy and financial markets. Often what is happening this week can have no bearing whatsoever on future outcomes. The supply chain issues present in the economy post Covid were a prime example. They were never going to last, nor was rampant inflation. To have soaring energy prices you require pent up demand. We were never going to have excessive demand as the world chugged along post Covid, hence crude oil, the major energy indicator has subsequently fallen, and now stabilised. Likewise the S & P was never going to fall off a cliff in times of falling inflation. Historically, as noted in my previous posts, the S & P rises in times of deflation. Likewise we were never going to have a significant US recession during a time when unemployment was at historic lows. Growing employment equates to bums on seats as it were, consumer demand and positive consumer sentiment, all factors required for ongoing GDP growth. Undoubtedly an individuals purchasing power may be eroded due to inflation and rising interest rates, yet demand for inelastic goods, milk, bread and clothes, underpins the strength of your economy during times of strong employment. Manufacturing may well weaken, the services and housing sectors suffer, but the wheels keep turning around, albeit at a slower rate.
What does this all mean for Imugene (IMU ASX). Well, I guess in essence it means investors don’t go chasing rainbows during market downturns, as they otherwise would during brighter weather. But markets are notorious for looking further out, as are growth stock investors. The recent fall in inflation sent out a signal to fund managers seeking long term growth to strengthen their fledgling results in 2022. Many if not all, hedge funds aside, want to see double digit growth, to keep their management fees alive in 2023/4. Imugene represents an opportunity to participate in a Top 200 company with enormous growth potential. Beaten down by up not 80 if not 90% from its all time high in a period of 18 months, there is plenty of upside for growth funds who have performed their due diligence on IMU. With over 40 price sensitive announcements since the stock began its decline, the fundamentals have grown incrementally stronger as the weeks and months have passed. Health care analysts are now predicting an on average 50 cent price target for the stock, given the product pipeline, clinical developments and patent runway in place.
What are the price triggers for IMU? On Thursday 40 million shares went through on a big green day for IMU following the inflationary print outs in the US. This could be viewed as a macroeconomic pull factor. Yet for me the pull factors leading toward price momentum could well be driven not only by clinical trial results, but by internal developments in the ensuing months. I note Dr Jakob Dupont has become heavily involved in Imugene’s development in 2023, since being appointed as a non executive director in 2022. Dr. Dupont served as Vice President and Global Head of Breast and Gynecologic Cancer Development for Genentech/Roche, where he was responsible for the global development of Herceptin®, Perjeta®, Kadcyla®, Tecentriq®, among others, having previously led the development of Avastin® for GYN and Breast Cancers when starting his industry career. Dupont has contributed to 12 regulatory approvals and 13 successful IND filings. Recently we noticed Dr Jakob Dupont assumed the role of executive partner at Soffinova Investments. Of note is the fact that Soffinova is predominantly an investment firm specialising in among other things, mergers and acquisitions. Soffinova Investments invest in both private and public equity companies. They are active partners with entrepreneurs across all stages of company formation, being long-term investors with extensive scientific expertise, vast industry knowledge, and a track record of helping forge the path from drug development and navigating the regulatory process to company building and IPO or M&A. Sound interesting does it not? What role if any are Dr Jakob Dupont and Soffinova Investment playing behind the scenes at Imugene?
Recently another internal development transpired at Imugene (IMU - ASX). The company chose to appoint Kim Drapkin as a non executive director in June. Drapkin is known for her role at the US Biotech Jounce Therapeutics, where she played an instrumental role in its IPO and listing on the NASDAQ. Does that sound interesting to IMU investors? In recent years Drapkin has served with Proteostasis Therapeutics (NASDAQ: PTI) (2019-2020) and Yumanity Therapeutics (NASDAQ: YMTX) (December 2020-December 2022). At both these NASDAQ listed companies, she served on the board. Drapkin comes from a financial consulting background and has been brought to Imugene with a view to expanding their investor footprint in the US. Does that mean bringing in a pool of Nasdaq investors were Imugene to go public over there? Last week another internal development took place at Imugene. CEO and Managing Director Leslie Chong resigned from her position at Chimeric Therapeutics (CHM - ASX) to focus on her duties and role at Imugene (IMU - ASX). What has changed in the past months at Imugene that requires her undivided attention? Clearly she herself has been in the US much more of late, travelling extensively between the East and West Coast. Who has she been meeting with and for what purpose? This role comes off the back of Imugene’s decision in March of this year to appoint Mike Tonroe as the Company Secretary, in addition to his role as Chief Financial Officer (CFO). Mr Tonroe was CFO and Company Secretary at ASX and NASDAQ-listed Genetic Technologies Limited and Opthea Limited, and prior to that was in the same role for private business Australian Synchotron Company Ltd. These tenures included management of the US IPO and NASDAQ listing of Opthea along with M&A, restructuring, capital raising and leading the finance function across these businesses. Yet another Nasdaq player to be introduced to a leading role at Team Imugene.
Another internal development of late is the decision to present a company overview and update this week to investors in Sydney and Melbourne, as opposed to the “Non Deal” Roadshows that took place in March. Something is surely brewing, I may be wrong, but I cannot imagine Imugene merely trawling out the same stock standard presentation they have delivered time and time again to the investment community in the past 12 months, without affording them any new news. Further to which why is it the company made the decision internally to have Monil Shah, Chief of Business, represent the company at the forthcoming Bio Shares Summit in Hobart? Shareholders have not seen hide nor hair of Shah since his appointment two years ago to bolster the company’s clinical, combination, investment and partnership status. Is he now stepping up to the plate to deliver on not only his own key performance indicators (KPI’s), but those of shareholders as well?
Insider trading is illegal, none of us can be flies on the boardroom walls nor see through them, therefore none of us can know with certainty what is happening at the board level within the Imugene group. Yet one doesn’t need to be Einstein to ascertain something is brewing. There is a concerned effort to enrol personnel with IPO and Nasdaq listing experience. There is definitely an objective in place to rally US investors to the cause. Whilst outside of clinical trial updates there appears to be moves toward commercialisation afoot. As always it’s pure speculation on my part, and draw your own conclusions, but from where I sit the road ahead just became a whole lot more interesting.
DYOR Seek investment advice as and when required Opinions only
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