The share price of biotechnology company Imugene Limited (ASX: IMU) has been on a tear this year.
Imugene shares are up another 13% today at the time of writing, meaning the share price has soared over 300% in the year to date.
With a market capitalisation now exceeding $600 million, Imugene is beginning to appear on the radar of many investors.
Imugene became listed on the ASX in December 2013 via a reverse takeover of Biolife Science.
What does Imugene do?
Imugene is a biotechnology company that develops a range of cancer immunotherapy treatments. According to the Cancer Council Australia, “immunotherapy aims to boost the body’s own immune system to fight cancer”.
More specifically, Imugene has a pipeline of B-cell immunotherapy vaccines in development, including HER-Vaxx, which targets tumours that over-express the HER-2/neu receptor, such as gastric, breast, ovarian, lung and pancreatic cancers. HER-Vaxx has received the most attention of late – more on this later.
Imugene is also working towards developing other vaccines such as PD1-Vaxx, which blocks PD1-signalling (a protein that exerts a negative effect on immune responses). Imugene believes PD1-Vaxx could play a role in treating tumours such as non-small cell lung cancer.
Additionally, in July last year, Imugene acquired the exclusive rights to CCF33 oncolytic virus technologies. Oncolytic viruses are those that can infect and destroy cancer cells.
Imugene’s recent big announcement
Yesterday, Imugene announced very positive results from its HER-Vaxx Ongoing Randomized Phase 2 advanced gastric cancer trial.
Interim analysis revealed that the median overall survival for patients receiving HER-Vaxx vaccine in addition to chemotherapy was 14.2 months. This compares favourably to the 8.8-month median overall survival for patients treated with just chemotherapy.
Amongst other findings, the group receiving HER-Vaxx resulted in a reduced risk of death of 58.2% when compared to the group receiving only chemotherapy, giving a hazard ratio of 0.418.
Pleasingly, the Independent Data Monitoring Committee verified positive survival outcomes and confirmed HER-Vaxx in combination with chemotherapy did not result in added toxicity.
Is the Imugene share price a buy?
Imugene’s pipeline and recent announcement have clearly generated a lot of buzz. As at the quarter ended 30 September, Imugene is not yet generating revenue. For the quarter, Imugene spent $4.2 million on research on development and used a net total of $4.9 million of cash on operating activities.
Perhaps I am too conservative, but I would like to see Imugene start earning revenue before getting excited. At that point, the Imugene share price could be multiples higher from where it is today. Conversely, it could be far lower if revenues do not materialise as hoped. Mesoblast Limited (ASX: MSB) is a great example of the wild share price volatility that can transpire for biotechs.
