Imugene - targeting tumours, or an M&A target?
More great posts on the IMU multi bagger threader by @davybabyk, @Outlander2 and of course today from @Jov88. In recent weeks the talk on the thread has centred around the prevailing IMU share price, Vaxinia results, a potential Her Vaxx deal and the opportunity presented by the newly acquired Azer Cel. Obviously PD1 Vaxx and forthcoming results in the B cell Vaccines combination trial with Tercentriq rates a mention. Following on from the AGM attention has turned from management to product development and thereafter product delivery, the question of if and when. On the management front I have suggested a few things including that if Monil Shah can’t put pen to paper in this financial year then the company should look elsewhere, but that takes nothing away from where Imugene stands as a value proposition from an investment perspective. From that viewpoint we had Roth Capital reaffirming a 46 cent price target for IMU last week, following on from the recent Vaxinia Results, where we were made aware of how patients dosed with the oncolytic virus at 10 to the power of 6 and 7 were fairing. There was a few patients recently dosed with 10 to the power of 8 highlighted in the ASCO Presentation, but perhaps not enough to gauge whether the trial is approaching the sweet spot product founder Yuman Fong was referring to when he spoke to IMU investors at a luncheon, back in March 2023. It’s a bit early to tell. Perhaps 10 to the power of 9, or even 10 to the power of 10 is the optimal biological dose rate for Vaxinia, time shall tell.
Imugene’s foundations have now been laid from a fundamental perspective. It has taken years and now the company is on a clear path toward Registration Trials on three if not four or five fronts. In particular Vaxinia with its recent FDA Fast track and Priority Review Status presents the greatest opportunity, as the drug is delivering positive immune responses even at relatively low doses. I am of the opinion that at high doses this drug offers oncologists a pathway for solid tumour patients to obtain relief from any form of cancer in due course. If Vaxinia can induce disease stabilisation in incredibly sick patients at these low doses, it could be argued the promise of partial and responses is just around the corner for earlier diagnosed patient with any form of cancer. Whilst the most appropriate mode of delivery of the OV needs to be ascertained, whether that is via a targeted combination therapy such as RenovoRX, or as a monotherapy, through IV, Oncarlytics or some other method, the OV’s effectiveness IMO is now undisputed. I for one am happy to call “proof of concept”, when it comes to the Vaxinia therapy arm in Imugene’s arsenal.M&A activity has been occurring mainly in later stage products throughout 2023, but there has been deals done for earlier stage products, such as Imugene’s, a trend which many analysts see as continuing. As outlined above M&A provides an attractive route for quickly establishing a presence and closing any portfolio gaps in a bIg pharma’s portfolio. Added to which there is often a Fear of Missing Out (FOMO), when it comes to new and emerging novel technologies such as ADC’s or radiopharmaceuticals. Oncolytic viral therapy may soon be added to that list, if Vaxinia continues to illustrate ongoing efficacy.
Then again it’s not just Big Pharma keen to get in on the renewed activity in biotech, investors are to. iqvia.com notes asset prices will likely increase in 2024, as EBPs have alternatives to the M&A route, triggering a potential snowball effect. Higher valuations for public biotechs, leading to bigger follow-on rounds which may unblock the IPO route, as more private companies are keen to tap into revived public markets. For context, they noted in a recent article that by the end of December 2023, the XBI biotech index was up by nearly 42% vs. its bottom in late October 2023, while 3 biotech IPOs were announced in the first week of 2024 alone vs. a total of 20 in 2023 – a harbinger of the IPO window re-opening at last? Where is IMU when everyone else is jumping on the Nasdaq train? I guess thats another question for management to ponder, in addition to the Monil Shah debate. Either way as barons.com has written, M&A deals heated up in late 2023, and 2024 could be even hotter, according to analysts with whom they spoke. I see Imugene as an M&A target not only as a result of the product category they are invested in , ie immunology, but due to the fact they have a sound business model. As analyst Ed Bagdasharian noted in an interview with Yahoo Finance late last week “I look at the M&A markets in 23 as a barbell. On the one side of the barbell, you have great companies that have good business models, and those had really all time high investor interest and valuations were very high. On the opposite side of the barbell were difficult troubled businesses that had tough models and certainly a troubled balance sheet.” Imugene clearly falls on the former side of Ed’s barbell, with only the valuation now needed to support their healthy balance sheet and sound business model.
Is the share price going to move north in 2024? Is M&A activity going to provide the fledgling IMU share price with some impetus? Is Monil Shah finally going to ink a deal for Her Vaxx, if not Imugene’s B cell platform as a whole? Or are the forthcoming Vaxinia results to be the catalyst for a re rate, when it comes to the IMU share price? I think it may be a combination of all these factors. I am not ruling out results from Azer Cel, Oncarlytics and PD1 Vaxx contributing to a potential Imugene re rate in 2024, though I do envisage the company's flagship candidate Vaxinia playing a leading hand. The breadth offered through solid tumour treatment both in terms of combinations for prospective suitors, revenue and FOMO could well prove the tipping point that ensures Imugene’s success. Is it to be at 10 to the power of 8, or the higher 10 to the power of 9 dose rate? Let’s wait and see. What we cannot see is which if any of the worlds big Pharma players find the oncolytic viral (OV) therapy market appealing. Which if any are mesmerised by this novel therapeutic approach, as they have been by Anti Drug Conjugates in 2023? Despite the OV T - Vec being approved by the FDA for the treatment of metastic melanoma recently, oncolytic viruses could still be seen as the newest frontier in cancer immunotherapy.
The notion that a virus can selectively target and kill cancer cells while sparing normal ones, represents in and of itself a huge value proposition for Big Pharma’s wishing to reignite their own dwindling pipeline portfolios. If in 2024 Vaxinia is shown to selectively replicate in tumour cells, and in doing so shrink if not eradicate tumours at higher dose rates, eliciting anti tumour responses, then it could go to the top of the pile when it comes to this emerging class of immunotherapies. Either way on a personal level I see Oncolytic viruses as being a major player in the cancer therapy arena moving forward, as they possess so many advantages. As noted by nature.com in 2023 Compared with the limited effect of other treatment methods, OV's can carry out multiple “weapons” to kill tumors systematically and comprehensively in multiple ways. OV's can also help to regulate the abnormalities in TME, such as neovascularization, tumor metabolisms, and the stiff extracellular matrix barrier brought by tumor stromal cells. In short, oncolytic therapy offers various advantages. Anti tumour activity may be released at the time the of tumour infection or perhaps before that, at the point when the virus enters the patients bloodstream. The jury is still out as to when the activation of antiviral immunity occurs, but what is pleasing in Vaxinia’s case, is that it is occurring.
Is a cashed up Novartis going to see Azer Cel or Oncarlytics as a gateway into Imugene, given their expertise in CAR T cell therapy? What about Bristol Myers Squibb, for the same reasons? Or how about Merck, due to their pending patent cliff? Could Roche's Schinicker see Imugene as the opportunity he was searching for, to add to his product pipeline? As outlined above I believe it now has less to do with where Imugene are at in the development of their product pipeline, and more to do with where BIg Pharma CEO’s wish to drive their own growth moving forward. To even the harshest critic I’m confident health care analysts can see the value in taking on novel therapeutic approaches such as Vaxinia and Oncarlytics, particularly when one considers the experienced research houses standing behind the technology. Now its more about working out whether they wish to develop the technology themselves, or chance their arm on Imugene's personnel to do so. Roche themselves have twice before purchased company's and run them as stand alone entities, rather than operating them themselves. Is imugene set to be another example of this business strategy employed by Roche? As with Vaxinia, time shall tell. But its looking pretty good, isn’t it.
DYOR Seek investment advice as and when required Opinions only
(20min delay)
