Immunomedics Inc.'s (NASDAQ:IMMU) presentation at the prestigious American Society of Clinical Oncology (ASCO) meeting currently underway has been shelved. ASCO informed Immunomedics' management late Thursday that, because the company's management previously presented material planned for ASCO at a conference in April, it had violated the Society's embargo rules.

News of ASCO's decision sent Immunomedics shares reeling on Friday, but investors might want to press the pause button before they join in on the selling. That's because ASCO's decision doesn't appear to have anything to do with the merits of Immunomedics therapy for triple-negative breast cancer, and everything to do with formality.

Delivering the goods

Immunomedics is studying sacituzumab govitecan for use in heavily pre-treated patients with triple-negative breast cancer. This patient population has a poor prognosis, and treatment options are limited.

Because this heavily pre-treated patient population is notoriously tough to treat, Immunomedics results for sacituzumab so far appear pretty remarkable. Specifically, in 60 patients, the objective response rate to sacituzumab was roughly 30%, or about double the historical rate for standard of care in these patients. Additionally, the median time to disease progression for patients receiving sacituzumab is 5.6 months, or roughly twice what has been seen in this patient population in the past.

Stinging rejection

Sacituzumab's results in Phase 2 are strong enough that ASCO agreed to allow Immunomedics to present its findings at its meeting this month in an oral presentation. Ahead of that presentation, investors bid up shares, thinking that ASCO's big stage would lead other investors to flock to its shares, too.

Unfortunately for these investors, ASCO's decision to nix Immunomedics from its event resulted in a disappointing 14.4% loss today.

IMMU Chart

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Looking ahead

Many investors who hit the exits today had bought Immunomedics specifically for the post-ASCO pop. Therefore, the drop in the company's share price today may say more about the risks of short-term trading than the opportunity ahead of Immunomedics because of sacituzumab.

Sacituzumab has already received FDA breakthrough-therapy designation for use in triple negative breast cancer following two prior treatments, and management reports that meetings with the FDA have encouraged them to file for an accelerated approval of sacituzumab as soon as possible. Although companies typically need confirmatory Phase 3 data before the FDA will weigh in with a decision, the agency can grant conditional early approval based on mid-stage results if a drug demonstrates robust enough efficacy versus current options.

Image Source: David Goehring via Flickr.

It's unclear when Immunomedics will file for accelerated approval, or if the FDA would accept its application. If the FDA does accept it, then it could also grant the company a priority review. If it does, then sacituzumab could get a go/no-go decision from regulators in six months rather than the standard 10 months.

Obviously, there's no telling how the FDA will ultimately view the trial data, particularly in light of the small trial size, and the lack of a control arm. Because of that, there's no guarantee that this drug will make its way to market anytime soon.

Nevertheless, selling shares in Immunomedics based solely on the news out of ASCO may not be the best move. Instead, investors need to consider the merits of Immunomedics medicine and potential market demand for it. In the long run, that's what will determine Immunomedics success or failure.