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Is Immunomedics Inc. Still a Strong Buy?

By George Budwell – Oct 12, 2016 at 6:31AM

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Immunomedics' shares bolted higher in September. Can this small-cap biopharma push even higher?

Image source: Getty Images.

What happened

Shares of Immunomedics (IMMU), an antibody-based therapeutics company, rose by more than 21% last month, according to data from S&P Global Market Intelligence.

IMMU Chart

IMMU data by YCharts.

Interestingly enough, though, this substantial move upwards occurred without a major clinical or regulatory update. However, the company's management did present at three investor conferences in September, which may have attracted some much needed interest in the biopharma's anti-cancer drug development platform from institutional investors. 

So what

Immunomedics exited the most recent quarter with roughly a year's worth of cash on hand. So, not surprisingly, management decided to take advantage of this upswing in share price to raise $30 million via a secondary offering

Now what

All eyes are currently on Immunomedics' experimental drug, sacituzumab govitecan (IMMU-132), for third-line metastatic triple negative breast cancer, or TNBC. The key factors at play are a possible accelerated regulatory filing for sacituzumab govitecan in TNBC that's on track for mid-2017, as well as a pivotal late-stage study slated to begin enrolling patients this December.

Immunomedics is apparently hoping the drug's encouraging mid-stage results will be enough to attract a lucrative licensing deal, whereby giving the company some additional breathing room from a financial standpoint to develop its remaining pipeline of anti-cancer agents. 

While a licensing deal seems like the smartest route, Immunomedics isn't exactly in a position of strength from a bargaining standpoint. After all, the company doesn't appear to have the resources necessary to carry out a large, late-stage study for sacituzumab govitecan on its own -- that is, without halting most of its other ongoing clinical activities. So, I'd personally wait to hear the terms of any deal before buying shares of this small-cap oncology company.  

George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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