Market Overview

PropThink: Analyst Rating and Trial Enrollment Completion Moving IMUC This Week


ImmunoCellular Therapeutics (NYSEAMEX:IMUC) is showing big gains on Thursday after the Maxim Group initiated coverage of the company with a Buy rating and a price target of $18.00. Shares were up 12% to $3.25 at noon. The company's lead product is a potential cancer vaccine called ICT-107 that completed enrollment on Wednesday of a Phase II trial for the treatment of glioblastoma. The drug is intended for use post-chemotherapy as a therapeutic, helping the body's immune system combat remaining cancer cells. A previous Phase I study demonstrated that the drug may improve patient survival before the cancer can regain strength. Interim data is expected in the first quarter of 2013. 

Investors see the potential for IMUC to follow Dendreon's performance from three or four years ago. Dendreon's (NASDAQ: DNDN) Provenge was the first cancer immunotherapy vaccine of its kind, approved by the FDA in 2010 for use in patients with prostate cancer. After positive Phase 3 data was announced in April of 2009, shares of Dendreon climbed from $4 to $23 within a month. Although this kind of performance should not be expected soon, Maxim's price target may be modeled off of early Provenge trials, and positive data in subsequent ICT-107 trials has the potential to drive shares similarly. However, investors have become hesitant with cancer vaccine compounds since Provenge's poor market performance; DNDN lacked the momentum that investors and analysts expected and shares have been weak since shortly after its approval.

A long-term position should be cautioned until a closer look at the Phase 2 data next year, but swing trades around management updates this year and interim data in 1Q13 will offer short-term profits. A plethora of bullish articles on Seeking Alpha since February have helped to double IMUC's share price in 2012 and increase visibility, but gains are probably unsustainable through the end of the year without the development of material news. IMUC has a little over 12 months of cash at its current burn rate and will require either debt or equity financing before further trials are initiated.

Oncothyreon (NASDAQ: ONTY) has a similar immunotherapy in development, called Stimuvax, that is also due for trial data next year - previous ONTY coverage is available here.

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