Should you be buying IMV (IMV Stock Quote, Chart, News TSX:IMV)?
The Halifax-based biopharm company now has the go-ahead to test its COVID-19 vaccine, and while Echelon Capital Markets analyst Douglas Loe feels the sightline on revenue related to that COVID-19 vaccine are still unclear, the stock looks good nonetheless, based on the company’s cancer therapies currently in clinical trials.
In an update to clients Tuesday, Loe kept his “Speculative Buy” rating but raised his target from $9.00 to $10.50 on his positive view of DepoVax (DPX), IMV’s antigen delivery platform.
IMV’s share price went through the roof on Tuesday as the market responded to news that Health Canada has approved Phase 1 testing for its DepoVax-formulated, water-free, lipid-based peptide antigen-based SARS-CoV-2 targeted immune therapy program.
The trial will be an 84-patient four-arm (two patient cohorts and two distinct doses) Phase
1 test, where the aim is to focus the immune response on the weaknesses of the virus,
according to IMV.
“We are working closely with regulatory agencies and our collaborators to initiate clinical studies as quickly as possible,” said Frederic Ors, CEO, in a press release. “The rapid progress in target selection, the vaccine formulation, manufacturing and preclinical results so far not only demonstrate the potential of our delivery platform, but also build on our previously reported clinical data from a similarly designed vaccine against RSV, the respiratory syncytial virus.”
Loe said he is encouraged by the Health Canada approval but sees no major surprises in the COVID-19 DepoVax formulation as IMV had already said that it had identified 23 peptide antigens that were predicted to cause immune cellular responses, a peptide set which has now been narrowed to four options.
At the same time, the promise from IMV’s other projects is enough to deserve a target raise, Loe said.
“With yet another DPX formulation soon to be in Phase I clinical testing, joining survivin-targeted DPX-Survivac (advanced ovarian cancer), SH-protein-targeted DPX-RSV (respiratory syncytial virus lung infection), HPV-E7-targeted DPX-E7 (gynecologic cancer), MAGE A9/survivin-targeted DPX-SurMAGE (muscle-invasive bladder cancer) and neoantigen-targeted DPX-NEO (solid tumours) at that stage of development, we
believe it is reasonable to shift the discount rate we ascribe to our NPV and discounted EBITDA/EPS-based valuation methods to 25 per cent from 30 per cent, while in parallel increasing our PT on the stock to $10.50,” Loe wrote.
“We are maintaining our ‘Speculative Buy’ rating on IMV, with our speculative designation solely based on the collective clinical stage of IMV’s DPX portfolio and not on our positive views on the platform itself. As we have commented before, since we initiated coverage on IMV, DPX has universally demonstrated its ability to support immunological response to disease-relevant antigens across multiple pathologies, just as we expect it to in the pending Phase I SARS-CoV-2 program,” he wrote.
At press time, Loe’s $10.50 target represented a projected 12-month return of 51 per cent.
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