Imugene - The financial car crash that need not have happened
@Steini I note you say Aussies are way behind when it comes to Car T and other biotech advancements. In my opinion therein lies the problem with Imugene. Imugene’s Board of Directors possess an inherent inability to look outside Australia, and indeed the box, to divine broader financial markets for traction, product awareness and funding. The Nasdaq, FTSE, DAX and Hang Seng to name but a few. Imugene's over reliance on the relatively small, virtually non existent biotech market in Australia, is bewildering, if not verging on mismanagement. The ASX market is comparatively the poorest of cousins when it comes to market capitalisation in the oncology space. The penny dropped for me when Leslie Chong and Paul Hopper started blaming macroeconomic conditions and the biotech space for their stocks poor performance, when all the time the Nasdaq biotech was slowly moving in the opposite direction to IMU. Unfortunately many investors have been fed their rhetoric and had to stomach the real pain accompanying significant financial loss. The facts and figures speak for themselves, As an example the IMU share price is down 72% at the same the Nasdaq Biotech Index is up 4 percent year on year (see below).
The fact is Imugene’s consistently low return on equity is unacceptable and the BOD need to be called out on this gross underperformance. Imugene’s science is outstanding, which only serves to compound the problem. For anyone worth their salt can see Imugene’s return on equity is pathetic, when one takes into account they have world leading scientists and innovators including Pravin Kaumaya, Saul Priceman and Yuman Fong in the building. Irrespective of what happens in the future Imugene’s BOD have missed their opportunity to capitalise on the Biotech sectors recent M&A activity within the field of oncology. For those unaware Big Pharma’s fat profits from COVID sales have seen them scouring the landscape in search of oncology treatment therapies, and paying telephone numbers for them as a result (see Seagen as an example). Due to Imugene’s failure to put one meal on the table for shareholders in the last two years, during Big Pharma’s transition toward immunotherapy and oncology, the meagre IMU market cap of little over $250 million USD continues to stare all and sundry in the face each morning, alongside the company’s dismal return on equity.
I sincerely hope that Monil Shah and his band of financial colleagues at Imugene have reached some sort of deal for either Her Vaxx, PD1 Vaxx or both prior to this years AGM. But unfortunately the sales phrase “Always be closing” does not appear to apply to them. So many people have lost so much money investing in IMU, when all the time the science has been improving. It's a financial car crash that needn't have happened. The failure to commercially capitalise on the initial PD1 Vaxx Phase 1 Trial success in late 2021, the brilliant OSR results for Her Vaxx in June 2022 and the recent FDA approval for oncarlytics are but three examples of how poor managements financial performance has been. I'm unaware of what key performance indicators management set these employees, but from the outside it would appear they set their own. At a time when biotechs selling potions for obscure, rare diseases such as Rhetts Syndrome have been skyrocketing, IMU’s management can’t even get their plane off the ground. Despite having a world renowned surgeon from one of the worlds leading cancer research facilities, with a veritable CURE FOR CANCER, steering the ship, Imugene has failed investors miserably. While CEO Leslie Chong is scuttling around small cap presentations in down town minuscule Australia the forecast 901.27 billion dollars on offer for investors worldwide in the solid tumour market, is floating by outside her window.
Imugene’s science is only a small part of the equation in considering value for investors. Whilst simply talking about your product does not mean anyone is going to buy it. Contrary to the opinions of others on these forums investors want to visualise not only your product strengths, but where they sit in the market, who the competition is, what the likelihood is to obtain FDA product approval, when that is likely to occur and in doing so what the future revenue looks like. In other words the nuts and bolts of your game plan. Team Imugene have always failed when it comes to recognising these key anecdotes when it comes to investing. As such they find themselves in the current debacle they are in, with a share price consistently heading south, shareholder value diluting year on year, and smaller less, recognised companies marketing obscure rare disease therapies overtaking them up hill and down dale. The cardinal rule of sales is to always make it about your buyer, which has never been the situation when it comes to imugene. It has never been about the investor, it’s always been about themselves. As Paul Hopper said in a meeting with shareholders in Sydney earlier this year, “It’s not my job to sell shares to you”. In reality many shareholders are of the belief it’s been his job to sell shares in their company to Bell Potter’s cosy customers for a fee. Customers who more often than not have moved onto the next bus stop in search of their next pay cheque, at the behest of retail investors in IMU.
No one is doubting the future value of Imugene and their science, particularly when one takes into account their impressive pipeline, unique value proposition and professional personnel. I for one am on record in suggesting Professor Yuman Fongs Vaxinia is set to revolutionise the way cancer patients are treated moving forward, forever and a day. But in looking to the future the Imugene BOD, whomever they are post November, need to look at the mistakes of the past and the utter neglect of the company share price at the expense of the share register. Not everyone is in a position to hold, and hold, and hold for years to come in the hope of a pay day down the track. The wheels of commerce need to keep turning. Not everyone has been granted millions and millions of options in a company they receive a salary from, as Imugene’s management have. It’s time this November for the IMU BOD to put up or shut up, to stand up and be counted, lay their cards on the table, come what may. I was laughed at for suggesting a Nasdaq listing years ago now, and more recently for suggesting the company outsource their M&A activities. Today I am suggesting yet again that Imugene totally outsource their communications and marketing to an independent third party. Once again in my opinion these are areas they need to focus on in returning value for shareholders to increase their market capitalisation and deliver on key components of their corporate mission, aside from the science.
In recent years Imugene have been akin to the football club rebuilding, when in essence there was no reason to rebuild. Rather than waste money on flying Professor Yuman Fong around the world hosting a handful of investor luncheons Imugene only needed to spend some money getting him on news channels and current affairs shows that rated globally, in order to tell his amazing story. In 2023 it’s called going viral. Unfortunately the only thing that’s gone viral is Imugene’s share price, and not in a good way. In achieving milestone after milestone when it comes to scientific advancements Imugene’s BOD may well have won the battle, but unfortunately they haven’t won the war. The recent confusion surrounding Imugene's current capital raise and the hesitancy to take up the share subscription on offer signifies a deeper rooted problem facing them this November. That being the loss of confidence in them exemplified by many IMU shareholders. Ongoing capital raises, more and more dilution, salary rises and the issue of options to themselves raised the ire of investors at last years AGM. This year it would appear the chickens are coming home to roost for the Board of Directors at Imugene, and not in a good way. "Don't bite the hand that feeds you", is an analogy that springs to mind, but it's all a little to late for them on that score.
DYOR Seek investment advice as and when required Opinions only
