Imugene and what might have been
Recently I began thinking of Imugene and of the missed opportunities their management team have had in successfully promoting, marketing and ultimately realising financial compensation for their achievements. Imugene’s B cell drug Her Vaxx was successful in extending sick gastric cancer patients lives, in addition to stimulating their immune systems. Soon after PD1 Vaxx contributed to a complete response in addition to several partial responses in incredibly sick lung cancer patients. Cf33, Vaxinia, Oncarlytics and other combination treatment arms followed the company’s initial B cell success stories, receiving similar accolades from within the medical fraternity and their peers. Yet unlike other biotech breakthrough stocks, Imugene have continually been caught in the down draft. Whether it’s a falling share price, an absence of international affirmation from peak media bodies and influencers, or simply a struggle to entice significant investment participation through the door, the management team at Imugene have let down retail investors when it comes to providing them with a decent return on their investment.
One could argue, as I have done previously, the company is fundamentally much stronger today, than it has been at any time in the past. Yet the fact remains, when Imugene’s management require funds to further their pipeline and platforms, they still need to raise capital at a discount to the prevailing share price of the day, and in doing so dilute their suffering shareholders, who have little or no say in the matter.
So where did it all go wrong for Imugene? Why did they fail to maintain a stable share price? How did they fail to convey an enticing message to the investment population at large? Okay so biotechs were slightly out of favour, and macroeconomic headwinds played a part, but the IMU share price decline far outweighed these contributing factors. Many shareholders began to ask pertinent questions of the company, much to the disdain of senior management. If your science was and is so promising, why are you continuing to raise capital at medium term lows, to a less than enthused share holder base? The answer to this and many questions surrounding the company’s fall from grace may stem from their blind faith in the science they are producing, as opposed to the investors charged with the responsibility of funding the said science. It goes without saying many of those buying into the company’s value proposition in earlier capital raises, are no longer in the house. Therefore a constant need to solicit new funding channels at discount rates has become evident. Each time retail investors assumed the company’s supposed “cornerstone”investors would be called upon, another collective of unknown investment participants was dragged toward the IMU ship. Discounts, giveaways and bargains down the track were all in play during these frantic moves to garner more funds, at the behest of Bell Potter. During these capital raises future clinical trials were always touted, with blue sky reigning supreme. Notwithstanding the planned funding continuing all the time amidst the backdrop of a falling share price, coupled with considerable pain and suffering at the hands of retail share holders.
Is it any wonder the market became increasingly confused with Imugene, given their propensity to concentrate on science, as opposed to business and commercial objectives? At first when the market struggled to fathom the complexity of Imugene’s science, there was some light at the end of the tunnel. Imugene developed a “Science Series” to quell shareholder queries, with scientific leaders proceeding to explain the rationale behind their products. But investor disillusionment was back on the agenda soon after, as Imugene’s business strategy appeared to change. At first management suggested they would sell their products toward the end of Phase 2 trials. Yet Her Vaxx proceeded to be left on the shelf, having completed its own initial Phase 2 study. Rubbing salt in investor wounds was the company’s decision to design a further two Phase 2 combination trials for Her Vaxx, one of which is still to eventuate. Many began to ask, “If the drug is so good why are we spending more money and wasting time aligning with other drugs, as opposed to a sale, or even a combination trial with our own safer vaccines, such as PD1 Vaxx?" Had the company strategy changed? Had the business personnel employed at great expense failed to sell Her Vaxx? The results for PD1 Vxx were outstanding as well, why couldn’t these business aficionados conjure up a sale or license agreement for it as well? Or was there in fact something the company had planned that investors themselves were unaware of? Confusion over the company science quickly spread to mixed messages when it came to business strategy and therein commercial outcomes for investors. The goal posts appeared to move further out as potential albeit prospective product licensing agreements and sales were dismissed with a “we’ll let you know when we know” reprisal.
Fast forward to 2023 with two shareholder “non deal” roadshows under their belt and Imugene had publicly moved on from their B cell platforms to shift focus toward their oncolytic viruses, Vaxxinia in particular. Professor Yuman Fong travelled down under to allay shareholder fears, speaking of the power of his potent vaccine to cure all manner of cancers. The results are coming soon many left the respective presentations believing, with share price re-rates imminent. Yet once again they were soon blind sided as a further capital raise at significant discounts to the share price of the day was manufactured behind the scenes. Yet again shareholders personal capital bases were eroded, all in the name of future scientific algorithms. Meanwhile the business algorithms, monetary forecasts and comparisons with similar products were left to the imagination. Just as the company failed to tell of individual patient stories, they failed to project not only how much revenue they anticipated to derive from their efforts, but of where future revenue was coming from. Shareholder questions began to resurface. Are we going to manufacture and develop these new drugs ourselves? Are “we” taking them to market? What exactly are we raising money for? Once again directors were offered attractive share and option packages in the new found plan, as were existing shareholders, who were fed some chips from the side walk to quash the disquiet.
Personally I believe in the said science, the recent acquisition of Azer Cel and the company’s decision to lease a manufacturing space and personnel. I commend the company’s decision to prioritise their Vaxinia Trial, together with the speed with which it is progressing. The forthcoming results could potentially set the biotech world alight. Once again I reiterate my support for Leslie Chong, the passionate CEO and managing director who has endeavoured to engage shareholders through newsletters, interviews and investor roadshows. Yet to the contrary I am less than impressed with Imugene’s decision to keep their B cell candidates in house, as opposed to engaging a financial/marketing partner. Any form of business or commercial outcome in this space could have alleviated much of the pain for retail holders, no matter how small the upfront or milestone payments may have been at the time. The ability of company personnel to actually close a deal would have garnered ongoing investor support and removed the constant need for further capital raises and eventual dilution. But alas that’s my opinion, just as it was opinion to suggest the company move toward a Nasdaq listing, years ago now. Captivating a broader audience in the US and beyond would have not only increased exposure for their products, but taken away the need to rely on relatively small international broking firms with relatively small biotech networks.
Maybe these outcomes are on the horizon. Perhaps a Her Vaxx deal is pending. PD1 Vaxx may well come to the financial fore. A Nasdaq listing could indeed be in the offing. I’m not holding my breath, but let’s wait band see. In the interim I’m divining my own blind faith, that being in Professor Yuman Fong, and the forthcoming Vaxinia results. I’ve been haemorrhaging for years now, but some lights finally appearing at the end of my tunnel.
DYOR Opinions only
