Jefferies Sees Accelerated Approval Of Immunomedics' IMMU-132 'Not A Stretch'

Jefferies assumed coverage of Immunomedics, Inc. IMMU with a Buy rating and $5.50 price target, saying shares are undervalued ahead of a partnership announcement on IMMU-132.

The company is in the process of completing various activities to support the Phase III study of sacituzumab govitecan (SG) in metastatic 3rd-Line triple-negative breast cancer (TNBC).

IMMU-132 has generated promising results in TNBC and the brokerage believes clinical/registration/CMC progress in 2016 sets the stage for a deal in the coming months ahead of Ph. III start by late 2016/early 2017.

Andrews expects a global partnership by first quarter 2017 and is driven by IMMU's progress on key issues during 2016.

"Based on '132's TNBC profile and FDA precedent, we assign a 55% probability of Accelerated Approval (AA) based on Ph. II data in 2018," analyst Matthew Andrews wrote in a note.

The analyst pointed out that FDA has approved Breakthrough Therapy Designation (BTD) designees Keytruda, Alecensa, Opdivo, Darzalex, Tagrisso, and Imbruvica based on objective response rate (ORR) and duration of response (DOR), via the accelerated approval pathway.

"While this regulatory precedent is applicable to SG in TNBC, ultimately the robustness of the 100+ patient dataset and FDA's comfort around CMC issues will drive its evidence-based decision," Andrews highlighted.

The analyst anticipates a 2018 launch in the US and a 2022 launch in the EU based on progression-free survival data and expects shares to trade up on an announcement of a "good" deal as it would remove a near-term overhang on shares.