Imugene Ltd (ASX: IMU)

Imugene is a biotechnology company dealing in cancer immunotherapy, and has a key product, HER-Vaxx cancer vaccine that is based on B cell peptides. HER-Vaxx primarily targets its receptor which is same for other injectable drugs (like Herceptin) available in the market, however, HER-Vaxx helps in producing a continuous supply of cancer targeting antibodies when the immune system is evoked. Thus, the market for the product seems to be good. The group has recently reported that its cash balance is decent as at 31 December 2017, and revenue for six months ending December 2017 of $20,826 was up by 52.6 per cent over prior corresponding year. However, net loss after tax attributable to its members widened to $1,632,852 by 9.4 per cent at the back of R&D Costs.

The company intends to now focus on the gastric cancer trial which is scheduled to happen in 2018 in the short to medium term. It has successfully conducted its Phase 1 clinical trial on patients with a metastatic breast cancer and the next trial (Phase 1b/2) is in patients with HER-2 positive gastric cancer (wherein a dose escalation has already been indicated). Phase 2 is yet to begin, and safety and efficacy data is also pending. Then, efforts on the arginine modulator could also prove to be beneficial in the microenvironments and can optimise the immunity to fight against cancer.

However, the overall financials are yet to improve, while we see ROE improving gradually (though in negative territory in 2017). The share price has risen by 65 per cent in the past six months, and by 75 per cent in the past three months. The stock was up 14.3 per cent on March 19, 2018 but fell 9.7 per cent in last five days. Meanwhile, Platinum Investment Management Ltd has reduced its voting power from 7.15 per cent in ordinary shares to 6.02 per cent in ordinary shares with 0.7 per cent in call options.

Given the risks related to clinical trials and R&D efforts, the already high run-up in prices, and competitive target market (that may open any alliance opportunity at the hindsight), it might be better to wait for some more positive progress on R&D front as growth catalysts.

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