(click to enlarge)ImmunoCellular Therapeutics Ltd. (NYSE: IMUC) is an interesting biotech stock that would be a great addition to your portfolio due to the amount of potential it holds. The company's stocks are trading 300 percent lower than the levels they reached late last year. However, many factors point to ImmunoCellular Therapeutics being oversold, making an upswing likely. Although the company has stated in a number of press releases the revolutionary nature of its research in the development of immunotherapies for treatment of various cancers, investors seem to be awaiting more solid results.
ImmunoCellular's products are based on the next generation of vaccine technology that works by activating a strong immune response to antigens released by tumors in the brain, ovaries and other parts of the body. The overall aim is to help the body stop tumor growth and increase chances of survival. ICT-107 is currently the company's lead product and has been undergoing Phase II clinical trials on patients that have recently been diagnosed with Glioblastoma Multiforme.
In December 2013, the company announced that ICT-107 had proved efficacy in progression free survival. This means the drug is effective in halting the growth of tumors. However, the company failed to prove if the drug increases overall survival, a key criteria that investors were looking for. As a result, the company's shares plunged by more than 50 percent to close the year 2013 at below $1 and they are yet to fully recover.
It is quite difficult to really determine that the stock has been oversold and is trading at a discount, but some facts do give us clues. Firstly, investors dumped the stock in December based on the failure of ICT-107 to improve survival rate. However, the Food and Drugs Administration gives the final approval of drugs to be used on the market and there have been cases of drugs being approved without proving overall survival. There is also the issue that the number of patients that underwent the trial was statistically too small to make any meaningful conclusions on the survival rate. Hence it is likely that investors have simply overreacted and this stock could see a comeback.
Measuring the Potential
ImmunoCellular Therapeutics seems to be a stock that is moving in the right direction. In June 2014, the company released information that further buttressed the results of ICT-107 and the drug might be moving towards Phase III trials soon. Besides the promising results from the company's leading drug, there other factors that make this stock a great buy.
Since the stock slumped last year, insiders have been buying. This is an indication that we could be in for quite some positive news soon. Furthermore, the company has no debt and is relying on equity investment to fund expenditures. The company is sitting on $25 million of cash, which is enough to see it through six years. Before November, 2013, research firm, Roth Capita had a $9 price target for this stock, a sign of the immense potential that is yet to be unlocked.