Shares of Immunomedics (NASDAQ:IMMU) fell nearly 11% today after the company reported fiscal first-quarter 2019 operating results. Immunomedics is a pre-commercial business, so there's not much for investors to peer into except, perhaps, the magnitude of operating losses accrued as the company attempts to transition to a commercial-stage entity.
On that note, the business racked up an operating loss of $57.1 million in the most recent quarter. That compares to an operating loss of $21.6 million in the year-ago period, although nearly all of the difference can be explained by an increase in research and development (R&D) spending for the company's maturing pipeline and preparation for the potential approval and market launch of its first product.
As of 3:28 p.m. EST, the stock had settled to an 8.8% loss.
Immunomedics stock has risen over 100% in the last year on the heels of promising data from clinical trials investigating sacituzumab govitecan as a potential treatment for various solid tumors. The company filed a biologics license application (BLA) with the U.S. Food and Drug Administration (FDA) seeking regulatory approval for the drug as a treatment in metastatic triple-negative breast cancer (mTNBC). The application was accepted months ago, and now investors are simply waiting for a regulatory decision on Jan. 18, 2019 -- hoping for approval.
Therefore, swelling operating expenses are not surprising by any means given the circumstances. However, Immunomedics noted in its press release that it was working "closely and collaboratively with the FDA to address outstanding review issues" regarding its BLA for its lead drug candidate. The mention of "outstanding review issues" may have spooked investors, but it's more likely referring to the stricter regulatory guidelines for biologic drugs than to something that unexpectedly occurred.
Additionally, Immunomedics announced that it had expanded its current collaboration with AstraZeneca to include metastatic non-small cell lung cancer indications. Financial terms of the expanded deal, if there were any, were not disclosed.
Despite the dramatic one-day loss, there doesn't appear to be much reason for long-term investors to worry just yet. Immunomedics remains on track for receiving a regulatory decision for its first product in early January 2019, has continued to investigate the drug's use in additional clinical trials, and even signed a long-term manufacturing contract with Samsung Biologics in September that will see the company fork over $82 million in the next three years for key components of the final drug product. Long story short, nothing has changed today for those thinking about the long-term potential of sacituzumab govitecan.