There’s still some upside in Immunovaccine, Mackie Research says

The stock is up more than 140 per cent year to date, but Mackie Research Capital analyst Andre Uddin thinks Immunovaccine (TSX:IMV) still has a ways to go.

This morning, Immunovaccine announced it will expand its collaboration with Leidos. The pair are developing peptide-based malaria vaccine candidates.

“We are very encouraged by what ImmunoVaccine and Leidos have together accomplished through this collaboration thus far,” said CEO Frederic Ors. “The intrinsic mechanism of action that underscores DepoVax has continued to demonstrate the ability to create targeted immune responses across a broad range of difficult diseases. As the program continues to advance, we look forward to the potential for a follow-up clinical study that could leverage our DepoVax technology in the global quest to address malaria.”

Uddin notes that there is some history between the two companies.

“This research collaboration with Leidos is the second vaccine candidate to be developed, the first was for a Zika vaccine candidate (April 7, 2016),” the analyst explains. “Leidos and USAID made this decision as IMV’s DepoVax-formulated vaccine candidates demonstrated immune protection against the malaria parasite delivered by mosquito bites in prior studies. IMV and Leidos are responsible for conducting additional pre-clinical and clinical studies. This collaboration further demonstrates that DepoVax can be widely used for potentially treating a variety of different diseases.”

In a research update to clients today, Uddin maintained his “Speculative Buy” rating and one-year price target of $2.20 on Immunovaccine, implying a return of 33 per cent at the time of publication.

“Our valuation is based on applying a 25x P/E multiple to our 2020 f.d. EPS estimate of $0.51 and discounting back by 80%. Our call on IMV has generated a 168% return since we initiated coverage,” uddin notes.

Uddin thinks Immunovaccine will begin to generate revenue in fiscal 2019, when he sees earnings of $0.01 on a topline of $17.1-million. He thinks those numbers will improve to EPS of $0.51 on revenue of $117.1-million the following year.