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IMV has a 120 per cent upside, says Industrial Alliance

IMV

IMV Impressive cancer trial results are keeping Industrial Alliance Securities analyst Chelsea Stellick bullish on clinical-stage biopharm company IMV (IMV Stock Quote, Chart, News TSX:IMV). Stellick reviewed the latest from IMV in an update to clients on Thursday, where she maintained her “Speculative Buy” rating and $10.00 target price, which at press time represented a projected 12-month return of 120.3 per cent.

Dartmouth, Nova Scotia-based IMV focuses on developing novel immunotherapies based on its proprietary drug delivery platform, DPX, with the company’s lead drug candidate being DPX-Survivac, which targets Survivin, an over-expressed protein in over 20 types of cancer.

IMV on Thursday reported updated interim data from its Phase 2 DeCidE1 study looking at the safety and efficacy of DPX-Survivac with intermittent, low-dose cyclophosphamide (CPA) in patients with recurrent, advanced, platinum-sensitive and platinum-resistant ovarian cancer. IMV said of 19 evaluable patients 15 (79 per cent) showed clinical benefit including partial response or stable disease in 26 per cent and 53 per cent, respectively. Long tail progression-free survival (PFS) was observed and consistent with immunotherapies in other cancer indications, with 39 per cent PFS at six months and 20 per cent PFS at 12 months (median PFS is 4.47 months and overall survival at 12 months is 66 per cent). IMV said the treatment was well-tolerated.

“IMV’s targeted T cell therapy continues to elicit a rapid and robust immune response with a demonstration that survivin-specific CD8+ T cells can infiltrate solid cancerous tumors. This could prove to be of significant interest considering that the narrowly focused action of cytotoxic CD8+ T cells allows them to kill single infected cells in tissue without creating widespread tissue damage,” said IMV president and CEO Fred Ors in a press release.

“These results also clearly support the relevance of DPX-Survivac as a potential new and much- needed treatment option for advanced recurrent ovarian cancer, a hard-to-treat indication where other immunotherapies have thus far had limited success and where there is a high unmet medical need for patients who have failed chemotherapy and PARP inhibitors,” Ors said.

On the Phase 2 trial and results (which she called impressive), Stellick said completion of the trial will not meaningfully change the outcomes as just reported but she is awaiting additional biomarker analyses which could inform design of an upcoming larger ovarian cancer trial.

As for IMV’s other trials, the company is currently running a basket trial for DPX-Survivac combination therapy with Merck’s cancer immunotherapy antibody Keytruda, with interim results expected in the first quarter of 2021, according to Stellick. IMV also has a trial ongoing with SPiReL trial of DPX-Survivac combination therapy with Keytruda in diffuse large B-cell lymphoma and will design a large Phase 2 trial in early 2021. And IMV’s DPX-COVID-19 Phase 1/2 trial is also expected to begin by the end of 2020 with interim data in the first quarter of 2021, according to Stellick.

“This morning, IMV updated the interim results of the DeCidE1 trial with favourable duration of response compared to approved therapeutics, confirming the benefit of DPX-Survivac,” Stellick wrote. “We believe with $54.7 million cash on hand, IMV is well-positioned to complete its Phase 2 SPiReL, DeCidE1 and Basket trials, and begin larger trials in DLBCL and ovarian cancer. We look forward to interim results from the Basket trial and DPX-COVID-19 trial in Q1/21. We value IMV using a sum-of-the-parts (SOTP) valuation to assess both the DLBCL and Ovarian Cancer indications. Using an average of a DCF and EV/EBITDA, we arrive at our $10.00 target price and Speculative Buy recommendation.”

IMV has had some wild swings in 2020 but the stock is up 16 per cent for the year.

Here are Stellick’s thoughts on the year ahead: “In 2021, we expect IMV to conduct biomarker and other translational analyses, complete the DeCidE1 trial, engage the FDA regarding trial design and release the details of a larger ovarian cancer clinical trial designed to move towards registration. Note that DPX-Survivac has previously received orphan drug designation from the FDA for ovarian cancer which makes it easier to attain regulatory approval. Overall, the oncology program has progressed nicely in 2020 for IMV and we look forward to expansion of the dataset supporting DPX-Survivac through 2021,” she said.

The analyst expects IMV to generate 2020 revenue and adjusted EBITDA of $0.3 million and negative $29.4 million, respectively, 2021 revenue and adjusted EBITDA of $0.1 million and negative $30.4 million, respectively, and 2022 revenue and adjusted EBITDA of $108.0 million and $71.0 million, respectively.

On the DPX-COVID-19, IMV reported in October receiving advisory services and up to $5.3 million in funding from the National Research Council of Canada Industrial Research Assistance Program to continue its clinical trials, with the company reporting in November that to date it has secured more than $10 million in funding for DPX-COVID-19 development.

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About The Author /

Jayson is a writer, researcher and educator with a PhD in political philosophy from the University of Ottawa. His interests range from bioethics and innovations in the health sciences to governance, social justice and the history of ideas.

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