The Imugene Limited (ASX: IMU) share price has taken a large hit today. Shares were down over 30% earlier today, but have since recovered and are now trading 12% lower from yesterday’s close.
Still, today’s dip isn’t too bad considering how hard Imugene’s shares have rallied over the past 12 months.
Long-term investors have been handsomely rewarded for their patience as shares have returned over 1200% over the past year.
IMU share price
What does Imugene do?
Imugene is an Australian clinical-stage biotech company that’s developing a range of treatments that seek to activate the immune system of cancer patients to identify and eradicate tumours.
Being a pre-revenue company, a lot of the excitement over the past year has been the result of various announcements that have caused some serious momentum to build.
Just last week, Imugene told the market it had entered into a licencing agreement for the patents covering a novel combination immunotherapy. The therapy works by unleashing a CD19 virus to enable a particular receptor to target solid tumours, which are otherwise very difficult to treat using different measures.
Managing director and CEO, Leslie Chong said that the technology has the ability to open up a whole new market as more types of cancers can be targeted.
Insider activity
On Tuesday, investors reacted positively to the news that insiders were increasing their holdings of the company.
Leslie Chong exercised 36.2 million options for the sum of $1.5 million, with a remaining 13.8 million options likely to be exercised shortly.
Executive chairman, Paul Hopper also exercised 25 million options for just over $1 million.
Imugene told the market that the additional funds will be used for further research and development activities.
Time to buy Imugene shares?
Like most clinical-stage biotechs, Imugene is yet to generate any revenue for its products and has been a consistent loss-making company for years.
Shareholders have been the primary source of fresh capital to fund its research. Shares outstanding have ballooned to just shy of 5 billion and the company now has a market capitalisation of around $2.3 billion.
The complexity around its product offering is enough to warrant not being a shareholder for me. I can happily say it’s out of my circle of competence, which is what we often look for as part of the Rask investment philosophy.
For more share ideas, I suggest getting a free Rask account and accessing our full stock reports. Click this link to join for free and access our analyst reports.
