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20 August 2021 | Update

BUY | Imugene Limited


BUY  |  Backed by a solid foundation with a reputation for success

Imugene Limited (ASX:IMU) is a $1.6bn, multi-product/platform biotechnology firm whose most advanced candidate (HER-Vaxx) is entering Phase 2 trials following very encouraging Phase 1 results.

HER-Vaxx is a promising candidate vaccine which trial results to date suggest stimulate patient’s B Cells (a natural part of the immune response) to produce antibodies that target cancer cells with certain proteins/receptors (HER-2) on their surface. There are many potential advantages of this method over the injection of monoclonal antibodies as is current practice alongside chemotherapy and other treatments. While IMU’s initial target is gastric cancer, the company believes this type of treatment may be effective in other cancer types which produce high HER-2 cancer cells including breast and lung cancer which represent very large potential end markets. We expect Phase 2 news on this candidate before the end of the year.

Meanwhile, IMU is also continuing the development of several other earlier stage candidates (CHECK-Vacc & PD-1-Vaxx) into clinical trials which will also help generate news flow in the coming months.

The company has announced plans to raise capital at 30 cents per share – a 10% discount to its last trading price and some 40% below the peak it hit in May (despite subsequently announcing positive Phase 1 trial data and receiving US FDA approval to undertake CHECK-Vacc Phase 1 clinical trial). The offer also includes a free attaching option for every two shares taken in the placement (which are expected to be listed on the ASX).

We feel the attractively priced $95m raising gives IMU the funding it needs to progress these programs (IMU has stated it will be fully funded until 2025) and potentially even look at other opportunities – something for which its well-regarded Chairman, Paul Hopper, is known.

While relatively large, well established, and highly funded following this raising, the company is a pure drug development firm and with that comes higher risk. Therefore, the stock is more suited to higher-risk aggressive portfolios. We look towards the company successfully achieving significant further milestones towards commercialisation over the coming year.



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