Since my previous article on ImmunoCellular Therapeutics (NYSEMKT:IMUC), I have received numerous questions on IMUC. This article will address the most frequently asked and most pointed of those questions.
Q: Was the ICT-107 data presented on June 1 at American Society of Clinical Oncology (ASCO) favorable?
A: I am strongly encouraged by the numeric advantages in favor of ICT-107 treated patients which were "large and clinically meaningful." Per the related press release, in HLA-A2 patients with methylated MGMT, "…the median PFS times for control and treated patients were 8.5 and 24.1 months, respectively, indicating about a 15.6-month or 184% statistically significant PFS increase for treated patients (HR=0.259, log-rank p-value=0.005)." This is a tremendous improvement over the current standard of care. As for the unmethylated population, Patrick Y. Wen, MD, Director of the Center for Neuro-Oncology at The Dana Farber Cancer Institute and Professor of Neurology at Harvard Medical School stated "We think that the maturing data from the Phase II trial demonstrate a compelling rationale for Phase III development of ICT-107 in patients with newly diagnosed glioblastoma [GBM]…Standard-of-care chemotherapy, temozolomide, has little or no treatment benefit for newly diagnosed GBM patients with unmethylated MGMT, which is the majority of patients. ICT-107 has shown the potential to meaningfully extend both OS and PFS without significant side effects in this patient population which has the poorest prognosis for survival."
Q: Do You Expect a Phase III study?
Yes. The results from the trial should enable the company to focus on specific subgroups with the highest potential both in terms of efficacy and market size. Andrew Gengos, ImmunoCellular's Chief Executive Officer, stated "The pre-specified subgroup analyses in our Phase II trial indicate the potential value of a targeted population approach going forward, as the demonstration of treatment benefit in HLA-A2 patients presents a favorable case for selecting these patients for the population to be studied in Phase III clinical testing…HLA-A2 patients comprise the majority of the overall GBM patient population in the US and Europe. These new results will provide a strong basis for conducting registration discussions with US and EU regulatory authorities, which we intend to start within the next few months."
Q: Why has the stock sold off?
Investors should recall the data was made available Sunday, June 1st, a day on which the stock did not trade so there was time to digest the data. On the next trading day, June 2nd, the stock traded up 20% pre-market on heavy volume and opened up 8% at $1.45. However, it sold off that day to close at $1.15 and closed at $1.20 on Friday, June 5. I believe the data was misinterpreted by investors expecting a statistically significant OS number. The fact is, that although the efficacy results are substantial, the study population is small and relatively few patients have died thus far, so the OS number is not yet statistically significant. But the trend revealed is extremely positive. As Dr. Wen commented, "Furthermore, the early evidence of a potential long-term survival 'tail,' even in this small Phase II trial, is promising, and indicative of what we would expect to see in a highly active immunotherapeutic agent."
Q: Are you still bullish on the stock?
Yes, I continue to add to my fund's position in the stock and Wall Street analysts are recognizing the opportunity as well. On June 2nd, Roth Capital analyst Joseph Pantginis upgraded ImmunoCellular to Buy from Neutral, raising his price target from $ 2 to $3 per share. Investors may recall he was on the sidelines in January awaiting more data and it's noteworthy that he upgraded shares following the update to the Phase II ICT-107 study. He believes a true addressable patient population has been identified and is optimistic about the next regulatory steps. Further, Maxim Group now has a $4 price target and still believes ICT-107 is a viable therapy for GBM. In fact, four analysts have buy ratings and one has a hold rating with an average price target of $3.42.
ICT-107 exhibits superiority to the existing standard of care. While OS data is not statistically significant, the trend is clearly positive in both my view and that of Dr. Patrick Wen's. The company is approaching a key point in its development as it approaches US and European regulatory agencies for a Phase III trial. I am surprised how cheap the stock is relative to the analysts' targets and its $4 price in late 2013, prior to the stream of positively trending, favorable efficacy data.
Disclosure: I am long IMUC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: This is not an offer to buy or sell securities. There is no guarantee of performance. Please consult with an investment professional before investing.
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