Outsource or feel the force - an alternate view - by WMHB
I am the supreme Imugene Bull, as my followers are well aware. Though even the most faithful IMU supporter would tend to agree it’s probably a good time for Imugene to perform an independent review of their business and commercial decisions of the past three years, before their growing shareholder base has a chance to perform one for them. Perhaps they could consider that irrespective of your market niche, a Public Limited corporations' primary objective is to make money to increase shareholder value. For instance, the company's founders can concentrate on yearly business growth or market share expansion. A common objective is to increase profits by lowering expenses and driving sales (see vakilsearch.com for more).
The consulting and investment banking world is littered with professionals who specialise in securing out licensing deals for biotech drugs. And I would note that contrary to popular belief, many of these deals are for pre revenue company’s and drugs. investor.com noted as recently as June of this year Big Pharma has a problem, and a plan to solve it. The problem? A looming drug patent cliff that will unleash generic competition on some of the industry's biggest moneymakers. The solution? A breakneck M&A spree for biotech stocks, funded by a massive war chest built on drug companies' success in bringing new medical treatments to market. In short the world is awash with experienced M&A investment houses looking to marry their Big Pharma customers with exciting new drugs. What has Imugene done to chase this money and secure a decent return for their shareholders? Why has Imugene chosen to disregard the services of leading investment bank, consultants and out licensing experts? Has the decision to continually raise funds and dilute shareholder capital, as opposed to out license their existing pipeline, been a sound one?
The answer to these questions may depend on whether you are a rusted on Imugene shareholder prepared to die with your stock, as opposed to one keen on breaking open the potential IMU treasure chest awaiting your grand children. Imugene’s continuing stance of promising “exciting results” in their ongoing clinical trials has become something of a nonsense for shorter term investors without such an extended investment time frame (i.e., those without grand children). Managements reticence to engage with licensing partners coupled with a desire to broaden their immunotherapy drug platforms as opposed to selling or out licensing them, is a bone of contention for many existing shareholders, who have experienced massive paper losses in recent years. Unfortunately for a number of former IMU shareholders these losses were actually realised, amidst the pain and suffering accompanying them.
Imugene has a tendency to come out swinging during and following capital raises, when new trials are announced, or should I say planned. The frustrating fact surrounding these announcements is that some of the trials gazetted have either not eventuated, or been pushed further and further out along the Imugene pipeline timeline. These delay’s and trial alterations have left many questioning earlier directives to raise more capital, for the said purpose of commencing and fast tracking fresh clinical trials. Further to which the company's lack of commercial direction has many questioning what indeed Imugene’s business team, headed by Monil Shah and Mike Tonroe, have actually been doing for the past few years. Speeches suggesting Imugene is talking with Big Pharma regularly with a view to securing a deal for their B cell and other drugs has become something of a laughing stock for those endeavouring to either recoup losses or keep food on their table. Contrarian IMU shareholders are of the view that with strong results from both Her Vaxx and PD1 Vaxx on the scoreboard, surely it wouldn’t have been too difficult for a third party to find a partnership, or partnerships, and in doing so identify target market(s) and assist in getting Imugene's vaccines into the right hands.
Personally I’m not that interested in investing in a relatively small R&D biotech company. Such a company would be competing with the likes of Roche, who spent $14.7 billion USD on R&D in 2022 alone, or Merck who spent $13.5 billion USD. IMO the $60 odd million AUD capital raised to take on these Goliaths would be fruit for the sideboard, paling into insignificance when compared to their R&D might. No, I’d much prefer to invest in a company who set parameters and targets around drug development, wherein commercial outcomes were realised on a frequent basis. Ideally I’d like my biotech’s hymn sheet to read something like this when it came to board meetings, “Okay so Her Vaxx is nearing the completion of its existing trial, let’s hire a third party investment bank or consultancy firm to sound out prospective partners and have them bring out licensing deals for the board to consider in the forthcoming quarter. Let’s review their upfront and milestone payment offers in conjunction with prospective royalty payments taking into consideration the status of the prospective partnering organisation. Or, PD1 Vaxx results are now in and they look promising, let’s liaise with an alternate investment bank or consultancy firm to sound out interest in a commercial deal for that drug. Pravin has a long list of Tigs and other B cell vaccines (and combinations) we may be able to work on should a deal be struck with PD1 Vaxx.”
Imugene needs to get on with it now and start delivering, before the rest of the world starts to catch up, if not overtake them. Outside of the newly acquired Azer - Cell allogenic therapy, many of their existing trials on relatively small cohorts of late stage, extremely sick patients, whilst bearing industry accolades, are far from yielding commercial fruit. Their focus on Vaxinia is great, given the trials progression and the quantum of patients to be enrolled. But it’s high time that trial too came out with some clinical updates together existing patient results, as opposed to all this hulabala about stealing thunder and needing to present at the world’s leading conference for medical science development in the capital of biotech land on a beach somewhere in the future. Just finalise the biopsies and necessary peer reviews and release the bloody findings without further ado Imugene, so investors can make their own calculated investment decisions, as opposed to swimming around naked in the dark. Then we can work with higher and optimal dose rates of Vaxinia as we go.
With all this in mind I for one wouldn’t be encouraging yes votes for anything at present, let alone capital raises, until I knew a deal was in the bag for one if not more of Imugene’s vaccines, be they B cell or otherwise. And while I’m at it anyone who thinks it is a good idea to offer shares in IMU at 11.6 cents years down the track, be they to directors or anyone for that matter is a clown. It would make more commercial sense to borrow the $30 million in three years time, than to start diluting the existing pie and provide virtual freebies to all and sundry, screwing the value of the existing SP as a result. Please don’t get me started on these nonsensical option charades concocted up between Imugene and Bell Potter. It’s a circus to think these options should be anywhere south of 30 cents a share in say 2026. They’re an option for heaven’s sake, investors can disregard them if they so choose. If the company can’t deliver a deal with a commensurate 30 million dollar price tag by that stage of the game for one or more of their products, they should give it away now. That said, a deal may well be imminent, which would be wonderful news for all involved, and if so I would be the first say well done Team Imugene. Though to the best of my knowledge the company does not have a signed deal or an existing alliance with a Big Pharma organisation. And irrespective of company plans to manufacture and continue their drug(s) development, IMO an alliance with a bigger biotech fish is eventually required to market the Imugene products successfully.
As I have noted previously, Imugene’s science is cutting edge, safe, innovative and in many ways ingenious. Their flagship candidate Vaxinia has the potential to open the keys to the castle when it comes to cancer treatment as we know it. If Oncarlytics and Azer Cel, or even Blincyto, can piggyback off Cf33 and Vaxinia, then another pot of gold is on the cards for existing IMU holders. But the reality of the matter is Imugene’s dance cards have been a long time coming, as have their much promised exciting clinical trial results. Trials take time, and they invariably cost money. Therefore if I was driving the bus I’d be hiring the best third party consultancy firm I could to partner me up and drive my exciting products home. That’s where I’d be spending my money. Keep in mind IMO it goes without saying Imugene’s own M&A team have delivered not much if anything to date by way of a commercial return to shareholders.
investor.com goes on to note in the aforementioned article:
“As of mid-April this year, pharma companies had announced $64 billion in biotech mergers and acquisitions this year, with big names like Pfizer (PFE) and Merck (MRK) on the list of shoppers. That put biotech on a "blistering" M&A pace in 2023, according to investment bank Torreya, (i.e.,now a Stifel unit”).
Where have Imugene’s Board been when all this M&A activity has been taking place, aside from planning how to personally secure more options, or give them away to the big end of town, and decimate the current SP in the process?
Actually now I think about it the above-mentioned Torreya partners may be a good place to start when it comes to anointing my third party consultancy firm. Or perhaps one of their competitors, either VTB Capital, DRP Capital or even Haler Finance. Let me find their numbers before the AGM, I may need them….
DYOR - Seek investment advice as and when required - Opinions only
Nothing happens unless you make it happen
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