BST Trade Alert: July 25, 2013
July 25, 2013
Recommendation:
Buy ImmunoCellular Therapeutics (NYSE: IMUC) up to $3.05 per share.
About the Company:
ImmunoCellular is an exciting biotech operating on the cutting edge of science and medicine. They’re developing immune-based therapies to treat brain cancer, ovarian cancer, and other solid tumors.
Here’s a quick overview of how immunotherapy is designed to work…
Our immune systems protect us from countless foreign invaders, including bacteria, viruses, and allergens. However, it typically does not target cancer because tumors arise within the body, not outside of it.
The purpose of immunotherapy is to trick the immune system into recognizing cancer as a foreign invader. Once that’s accomplished, the immune system should activate its sophisticated weaponry to destroy the cancer.
Now, the immune system has two different arms.
The cellular (T-cell based) immune system deploys special killer cells to target and destroy foreign invaders. The humoral (B-cell based) immune system produces antibodies and carries them through bodily fluids to foreign invaders for destruction.
ImmunoCellular’s strategy is to utilize both of these mechanisms to maximize the powerful synergies between them.
Cellular immunotherapies have potential to provide long-term protection against cancer and prevent its recurrence. Monoclonal antibodies, on the other hand, can offer an immediate shield against the disease.
What distinguishes ImmunoCellular’s drug candidates from the competitions’ drugs?
While many other cancer immunotherapies only target a single cancer antigen, ImmunoCellular’s can elicit an immune response against several antigens. What’s more, they’re able to target cancer stem cells that are the primary drivers of tumor growth and disease recurrence.
This a huge potential advantage for ImmunoCellular.
You see, by targeting multiple cancer antigens, the company’s drugs have a much greater likelihood of being an effective treatment. And they have a greater chance of preventing tumor escape mechanisms that are sometimes seen with single-targeted therapies.
In addition to groundbreaking technology, ImmunoCellular also offers a solid financial profile.
The company’s sitting on $24 million in cash with no debt. And their cash burn rate is approximately $2.75 million per quarter. At that rate, the company has sufficient cash to fund its operations and clinical programs for the projected timeframe of this trade.
Let’s take a look now at the biotech’s leading drug candidate…
About the Drug:
ImmunoCellular’s most clinically advanced drug candidate is ICT-107. It’s a therapeutic dendritic cell vaccine for treating the most common and most lethal form of brain cancer, glioblastoma multiforme (GBM).
ICT-107 is designed to activate a patient’s immune system to target six different antigens found on the patient’s tumor cells. The vaccine is used after conventional therapy or in conjunction with chemotherapy in patients with newly diagnosed GBM.
And so far… it’s performed very well in clinical testing.
In a phase 1 trial, ICT-107 was well tolerated with no significant adverse events reported. Of the 16 patients participating in the trial, 7 continue to survive. And of these 7 survivors, 5 remain completely free of the disease after four years, including 3 who remain disease-free for more than 5 years.
Here’s the key…
The trial results suggest ICT-107 may be more effective than the current standard of care in treating newly diagnosed GBM. For the 16 patients treated with ICT-107, median progression free survival (PFS) was 16.9 months and median overall survival (OS) was 38.4 months.
These figures marked huge improvements over current standard of care historical values. Median PFS and OS for the current standard of care in newly diagnosed GBM patients are only 6.9 months and 14.6 months respectively.
What’s the next step for ICT-107?
At present, the drug is undergoing a phase 2 trial to evaluate its safety and efficacy in 124 patients with newly diagnosed GBM. And the trial is going well so far. In June, a data monitoring committee completed an interim analysis of the trial and concluded it should continue to completion.
Top-line results from this important phase 2 trial are expected by the end of this year. This event should act as a powerful near-term catalyst for the shares.
About the Market for This Drug:
The American Cancer Society estimates that about 23,130 malignant tumors of the brain and spinal cord will be diagnosed in the US this year.
GBM is the most prevalent and the most deadly form of brain cancer. Over 10,000 new patients are diagnosed with GBM in the US each year. And despite advances in surgery, radiation, and chemotherapy, recurrence is almost a certainty.
In fact, recurrence happens within 6.9 months on average.
The median survival time for newly diagnosed GBM is only 14.6 months. And fewer than 10% of these patients live more than 5 years.
The current treatment for newly diagnosed GBM is a drug developed by Merck called Temodar. Worldwide sales of the drug have approached $1 billion annually over the past three years.
Clearly, ICT-107 has huge market potential if ultimately approved by the FDA.
About the Potential Catalyst:
Top-line results from the phase 2 trial of ICT-107 in newly diagnosed GBM are expected by the end of 2013.
About the Shares:
The time is now to grab your shares of IMUC. We believe the upcoming phase 2 trial results will act as a significant upside catalyst for the stock.
In fact, the shares have already begun moving higher in anticipation of these important results.
After hitting a low of $1.51 in November 2012, IMUC has been trending higher ever since. The recent price of $2.78 marks an 83% gain off the November low.
While this move certainly qualifies as a big short-term gain, the stock still has plenty of upside potential.
The median price target of the four analysts covering the stock is $8.00 per share. If the stock trades up to that level, it will provide investors with a whopping 188% profit from here.
Don’t waste any time picking up your shares of IMUC. You definitely don’t want to miss out on these huge potential gains.
Key Facts:
| Company: | ImmunoCellular Therapeutics |
| Ticker: | IMUC |
| Recent Price: | $2.78 |
| Market Cap: | $146 million |
| Avg. Daily Volume: | 651,767 shares |
Chart:
Category: BST Trade Alert
