Immunomedics (IMMU) Soars After an Update Regarding its ADC Programs

Shares of biotech Immunomedics (IMMU) soared 16% at the end of last week, defying the slumping market, after the company provided a long-awaited clinical update regarding its antibody-drug conjugate (ADC) programs. ADCs are considered a crucial piece of cancer research, since they attach a chemotherapy toxin to a single antibody, which is taught to recognize proteins associated with a targeted cancer.

When the trained antibody comes in contact with the targeted protein, it releases the chemotherapy toxin in an effort to kill the cancer cell, while sparing healthy cells. Daily Chart
If ADCs are successful, they can actually spare cancer patients the painful process of chemotherapy. Traditional chemotherapy not only targets cancer cells, but also any cells that divide rapidly - including cells in the bone marrow, digestive tract and hair follicles. This leads to the worst side effects of chemotherapy - the decreased production of blood cells, a weakened immune system, the inflammation of the digestive tract, and hair loss. In its recent update, Immunomedics announced the two of its three tested ADCs, IMMU-130 and IMMU-132, caused tumors to shrink, and had positive effects in metastatic colorectal cancer and triple-negative breast cancer. IMMU-130 is designed specifically for colorectal cancer, and IMMU-132 has been tested on 13 different types of cancer. Immunomedics uses a proprietary system, which it calls "Dock and Lock," which distinguishes it from competitors. Immunomedics is not the only biotech company researching ADCs, which are widely regarded as the future for cancer treatment. ImmunoGen IMGN has been developing a proprietary technology similar to Immunomedics' ADCs. ImmunoGen already offers a FDA-approved drug for HER2-positive breast cancer, known as Kadcyla, which is used in combination with Roche's Herceptin. Seattle Genetics also has an ADC pipeline, which is pursuing the same goals. In addition to advances in ADCs, Immunomedics also specializes in radiotracer technology. Radiotracers are comprised of a small peptide which a fluorescent dye and a linker known as DOTA, which is used for radiolabeling. Radiotracers are useful tools for the accurate location of tumors during surgery. Although Immunomedics' technology is cutting edge and could unlock the cure to various kinds of cancer, its stock is highly volatile. Since its public debut in 1984, the stock has only risen 33%, while the NASDAQ has risen 1,200% over that same period. Shares of Immunomedics peaked at $37 per share prior to the dot-com crash, but shares have fallen to $5 over the past decade. Yet even at this low price, it is still trading at a premium, at 8.12 times its book value, and a negative profit margin of -263.55%. It is currently unprofitable, but it managed to grow its revenue by nearly 80% last quarter. In other words, this is a highly speculative stock that has very little fundamental scaffolding underneath, and will surge and plunge on news of the progress of its clinical trials. Other News About IMMU Immunomedics Develops Novel Dual System for Tumor Detection and Imaging Immunomedics produces new detection and imaging technologies. Immunomedics Reports Progress With Labeling Proteins Immunomedics surges on ADC progress. Other Stocks in the News Let the Bite-Sized Video Wars Begin! Will Instagram video be the next big thing? IsItTimetoInvestinDiscountAirlines? Why are discount airlines so good at making money? Copyright 2013 by, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA, Inc.) or its employees responsible.

Published on Jun 28, 2013
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

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