IMV has a huge upside, says Echelon Wealth

Immuno-oncology company IMV (IMV Stock Quote, Chart TSX:IMV) has announced new data from its lead candidate cancer drug DPX-Survivac, an event which Echelon Wealth partners analyst Douglas Loe is calling encouraging.

In an update to clients on Tuesday, the analyst reiterated his “Speculative Buy” rating and $12.25 target for IMV, which translated to a 12-month return of 140 per cent at the time of publication.

Last weekend, Halifax-based IMV formally presented data from its Phase II advanced/recurrent ovarian cancer DeCidE trial at the 2019 meeting of the American Society for Clinical Oncology. The new data concerns seven evaluable subjects of the trial, with five of them exibiting stable disease, a proportion that Loe is taking to be positive for that refractory form of cancer.

The trial, which is evaluating the safety and efficacy of DPX-Survivac, appears to be delivering solid results, according to Loe.

“We of course do not wish to over-interpret clinical outcomes from small patient sets, and seven DeCidE patients is in our view a small patient set, but regardless, evaluable patients certainly suggest to us in aggregate that DPX-Survivac is generating the T-cell responses that we believe it would require to engender any clinical response, and baseline tumour burden still seems to be a useful baseline characteristic of responsive patients, and one that can be easily assessed at enrollment and monitored throughout therapy with conventional CT scanning, which is conventionally used to monitor ovarian tumour responsiveness anyway,” says Loe.

The analyst says, however, that he is looking for IMV to advance other pipeline formulations of DPX in order to show that the company’s platform can generate value across multiple immune therapy silos, including but not limited to ovarian cancer.

“For now, we are maintaining our Speculative Buy rating and price target of $12.25 on IMV, with our valuation still based on NPV (25 per cent discount rate), and multiples of our fiscal 2024 EBITDA/fully diluted EPS forecasts. In our F2024 reference year, we project adjusted EBITDA and EPS of $86.0 million and $1.33, respectively,” says Loe.