IMV has 48 per cent upside, Mackie Research says

Biotech company IMV (Quote, Chart TSX:IMV) has reported positive preliminary results from its trial of cancer vaccine DPX-Survivac, reports analyst Andre Uddin of Mackie Research Capital Corporation. In a client update on Tuesday, Uddin reiterated his “Speculative Buy” rating and 12-month price target of $10.40.

IMV’s Phase II trial features a triple combination of DPX-Survivac, low dose cyclophosphamide and pharma company Merck’s Keytruda antibody drug, with the primary endpoint being a minimal objective response rate after six months of treatment and secondary endpoints of tumour regression, duration of responses, T-cell immune responses and potential biomarkers of immune and clinical responses.

Uddin says that the reported preliminary results show that two of the first four evaluable subjects showed tumour regression of 66 per cent (partial response) and 48 per cent at the first CT scan after treatment. The third patient had a stable disease and the fourth had tumour progression within two months of treatment. Altogether, a positive result, says the analyst.

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“To date, the combination of DPX-Survivac, Keytruda and low-dose cyclophosphamide has been well tolerated in this study, with no serious adverse events reported. Continued positive results could result in advancing this combo into a pivotal trial sooner rather than later,” Uddin says.

The analyst notes that another Phase II study with DPX-Survivac in combination with Keytruda is underway, with top-line results expected by late 2018/early 2019. Uddin says that more positive results from the two studies “could potentially facilitate a collaboration between IMV and Merck.”

Uddin’s $10.40 target is based on applying a 25x P/E multiple to his 2020 fully diluted EPS estimate of $1.56 and discounting back by 55 per cent. The target represented a projected return of 48 per cent at the time of publication.