In a note to investors last Tuesday, investment banking firm Dawson James initiated coverage on shares of Immunocellular Therapeutics Ltd. (NASDAQ: IMUC). Here are some highlights from the report:
Initiating Coverage with a Buy Rating and Price Target of $5 Immunocellular Therapeutic’s ICT-107 is an immunotherapy for glioblastoma multiforme (GBM) that has shown promising improvement in survival benefit. Trading at a 66% discount to comparable companies with mid-stage immunotherapies in development ($122 MM), we believe IMUC shares represent a significant value proposition (adjusted enterprise value $49 MM), therefore, we rate IMUC shares a Buy and set a year-end 2011 price target of $5.
Targeting Stem Cells Key to Defending Cancer Growth and Metastasis By targeting cancer stem cells (CSCs), IMUC’s strategy actively directs the body’s own defenses against the primary driver of tumorigenesis and tumour growth, potentially decreasing the ability of cancer cells to evade immune system detection and enhancing the ability of the patient to mount a persistent defence.
ICT-107 – A Next-Generation Dendritic Cell-Based Immunotherapy The six antigens IMUC uses to make ICT-107 show high levels of expression in CSCs. In results from a Phase I study presented at the American Society of Clinical Oncology (ASCO) meeting in June 2010, survival results observed in GBM patients treated with ICT-107 compared favourably to GBM patients treated with standard of care (SOC), i.e., median not yet reached vs. >14.6 months with SOC. If confirmed in the ongoing randomised, controlled Phase II study, we believe the results with ICT-107 will strongly support a paradigm change in the treatment of glioblastoma and make ICT-107 a new blockbuster therapy.
Efficacy is Paramount but Key to Commercial Success is Manufacturing Dendritic cell vaccines are made individually for a particular patient through an intensive procedure. Compared to the low yields and gross margins achieved with the manufacture of the prostate cancer vaccine, Provenge, IMUC estimates much better economics with ICT-107, which could help the company realise a faster path to profitability.
IMUC – A Value Approach to Treating Cancer We believe the scientific rationale for using an immunotherapy approach in targeting cancer stem cells sound, and IMUC at the forefront of using the immunotherapy approach. With ICT-107 demonstrating promising data in GBM, we believe the company poised with a potential blockbuster cancer vaccine. We therefore recommend investors consider the value proposition in IMUC and buy the shares.
For the full report, click here.
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