Roth MKM has released a research report of Imugene Ltd (ASX:IMU, OTC:IUGNF) following the company’s initial results from its Phase 1 MAST trial evaluating VAXINIA which showed encouraging initial results, particularly in gastrointestinal tumour patients.
Roth MKM research analyst Jonathan Aschoff has a 'buy' recommendation and a 46 cents 12-month share price target on the clinical-stage biotech.
This represents a significant premium to Imugene’s current share price of around 7.6 cents, having recently bounced off 3-year lows of 4.1 cents.
Phase 1 MAST trial evaluating VAXINIA
“IMU recently released initial clinical results from its Phase 1 MAST (Metastatic Advanced Solid Tumours) trial evaluating VAXINIA (oncolytic virus therapy), which is treating cohort 5 of the intravenous monotherapy dose escalation portion and treating cohort 3 of the intravenous combination therapy (VAXINIA plus pembrolizumab) portion.
“The MAST trial also has cohorts dosing VAXINIA intratumorally, as monotherapy, and along with standard intravenous pembrolizumab dosing. Thus far, 34 heavily pretreated patients have been dosed with VAXINIA, including 16 intratumorally and 18 intravenously, including both monotherapy and combination therapy cohorts.
“The 25 efficacy evaluable patients received at least one scan, seven patients have their first scan still pending, and one patient progressed before their first scan. Of the 26 evaluable patients, the best responses were one complete response (CR), one partial response (PR) (melanoma patient taking mid-dose VAXINIA), 16 stable disease (SD), and eight progressive disease (PD) as measured by iRECIST and RECIST criteria.
“Particularly encouraging initial results were seen in gastrointestinal tumour patients (colorectal, bile duct, pancreatic and liver cancer), where six of eight (75%; all six given VAXINIA monotherapy) such patients (seven monotherapy and one combination therapy) had disease control.
“When including just the seven patients taking monotherapy, the disease control rate was 6/7 (86%). Given that one of two bile duct cancer patients achieved the lone CR (so far lasting 350 days after taking middose VAXINIA), and the second achieved SD for over four months, trial expansion is planned for 10 patients with bile duct cancers taking VAXINIA monotherapy.
"We note that there have been no adverse safety signals from VAXINIA thus far, and that bile duct cancers are difficult to treat and typically respond poorly to immunotherapy.”
Price target: 46 cents
Roth MKM has a 12-month price target of $0.46.
“This is based on a DCF analysis using a 15% discount rate that is applied to all cash flows and the terminal value, which is based on a 5x multiple of our projected FY2031 operating income of about $1.3 billion. Factors that could impede shares of Imugene from achieving our price target include any of its three modelled immuno-oncology products failing to succeed clinically.
“Also, the FDA and foreign regulatory authorities could fail to approve Imugene's products even if their respective pivotal clinical trials succeed, in the event the agency views the results as not clinically meaningful. Loss of key management personnel could also impede achieving our Imugene price target, as could the significant delay of clinical progress from, for example, lasting COVID-19 headwinds.”