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Why Immunomedics Shares Soared

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Immunomedics (NASDAQ: IMMU  ) , a biopharmaceutical company researching monoclonal, antibody-based products to treat cancer and other autoimmune disorders, jumped as much as 15% after providing a clinical update on its antibody-drug conjugate programs.

So what: Antibody-drug conjugates, or ADCs for short, attach a chemotherapy toxin to an antibody and essentially teach that antibody to recognize a protein expressed by the targeted cancer. When the antibody comes in contact with that specific protein, it releases the toxin, hopefully killing the cancer cell and leaving healthy cells alone.

Today, Immunomedics noted that two of its three ADCs -- IMMU-130 and IMMU-132 – delivered tumor shrinkage and some partial responses in early stage studies, especially in metastatic colorectal cancer and triple-negative breast cancer. IMMU-130 is being tested specifically on advanced colorectal cancer, while IMMU-132 is being tested on 13 different cancer types.

Now what: We're still in the top of the second inning of a nine-inning game here, but ADCs certainly appear to be the future of cancer therapy -- at least one path to treating it. Immunomedics still has a long road to climb as its two ADC peers are much further along in their development process. ImmunoGen (NASDAQ: IMGN  ) , for instance, already has an FDA-approved drug for late-stage HER2-positive breast cancer known as Kadcyla that utilizes the company's proprietary targeted-antibody payload technology (the same concept as ADCs with a different name) in combination with Roche's Herceptin. In trials, this combo extended median overall survival by 5.8 months over the placebo to 30.9 months. Something similar can be said for Seattle Genetics and its ADC pipeline.

The point is, I do see quite a lot of potential in Immunomedics, but you also need to keep your expectations in check.

Craving more input? Start by adding Immunomedics to your free and personalized Watchlist so you can keep up on the latest news surrounding the company.

While you can certainly make huge gains in biotechs like Immunomedics, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

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Related Tickers

9/28/2016 4:00 PM
IMMU $3.39 Down -0.01 -0.29%
Immunomedics CAPS Rating: *****
IMGN $2.76 Down +0.00 +0.00%
ImmunoGen CAPS Rating: ****