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Why Immunomedics Stock Skyrocketed 125% in April

By Beth McKenna – May 12, 2020 at 8:19AM

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This biotech's advanced breast cancer drug got the green light from the FDA.

What happened

Shares of biotech Immunomedics (IMMU) skyrocketed 125% in April, according to data from S&P Global Market Intelligence

By comparison, the S&P 500 index returned 12.8% last month, as the market made a strong comeback from March's big coronavirus-driven sell-off, which drove the index (including dividends) down 12.4%.

So far in May, through Monday, Immunomedics stock is up just over 8%, while the broader market has returned less than 1%.  

"FDA approved" in white letters on a red background.

Image source: Getty Images.

So what

We can attribute Immunomedics stock's powerful performance last month largely to the company's April 23 announcement that the Food and Drug Administration (FDA) approved its drug Trodelvy for use in metastatic triple-negative breast cancer (TNBC).

Shares shot up 19.2% that day, while the market was flat, and continued to move higher through the end of the month.

As my colleague Todd Campbell wrote at the time, the "FDA's blessing clears the way for Immunomedics to begin marketing Trodelvy's advantages as a third-line treatment option."

Now what

April's news was particularly sweet for investors in Immunomedics, which has had a turbulent year and half. The FDA declined to approve the company's TNBC drug in January 2019 because of issues at the manufacturing plant where it was to be produced.

That said, cautious optimism is the name of the game as the company moves into a commercialization phase. 

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool recommends Immunomedics. The Motley Fool has a disclosure policy.

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