Don't look now, but Immunomedics, Inc. (NASDAQ:IMMU) is on the mend. This tiny biotech name's investors had nothing less than a miserable 2012, but the stock's action this week - and really since the end of February - suggests IMMU is ready to dole out some rewards for its faithful followers.
IMMU is best-known for its cancer research. It's developing Epratuzumab as a treatment for Lupus as well as Lymphoma. The former is in Phase 3 trials, and the latter is in the late-Phase 2 stages. In fact, it's got four other Phase 2 trials underway right now, all of them testing a similar treatment called Veltuzumab, aimed at pancreatic cancer, NHL, and rheumatoid arthritis. Immunomedics also has six Phase 1 trials underway too, mostly trying out Veltuzumab or Milatuzumab... built on the same platform as its more advanced trials.
If it seems like an unusual mix of ailments that only a handful of drugs (and just one platform) are attacking, you're not crazy. Then again, it works because the therapies IMMU is developing are antibody-based therapies and personalized medicines, which makes them multi-purpose.
Great, but what happened in 2012 that was so miserable, and what happened this year that's been so great for the company? After all, Immunomedics shares fell from a high of $3.90 in early 2012 to a low of $2.11 by mid-February of this year, only to snap back to $2.65 this week. (That move, by the way, pushed IMMU back above the 50-day moving average line, and did so on higher volume... a key bullish hint in itself.)
While no single setback last year can be blamed as the catalyst for the bearish move from IMMU, several small stumbles collectively ended up weighing the stock down.
One of them was the perception of a lack of progress. The company's PR department wasn't very busy last year. Part of that may have just been a lack of appreciation for the fact that getting attention is half the battle for a biotech stock. Or, perhaps the company was in the middle of all its trials, and simply had nothing to report. Either way, it can let stocks slide.
Or, perhaps it was the distraction of an arbitration case that Immunomedics actually brought against another company it had invested in. Maybe it was the downgrade of the stock last May. Most likely, though, it was a combination of all those factors (and more) that were pulling IMMU lower.
Biotech trading can be a funny game sometimes, however, and just when it looks like a stock is ready to zig, it zags. That appears to be what's going on here anyway, now that a few bullish catalysts have fallen into place.
One of those catalysts is the fact that Immunomedics, Inc. actually won its arbitration case, and was awarded a settlement of $18 million. At the same time, the company is actually approaching the endzone with its current Phase 3 trial of Epratuzumab as a treatment for Lupus. Or/and - and this may be the most important of all - IMMU is something of a rarity in the world of small cap biotech stocks, in that the company is already driving sales with a couple of revenue-bearing products.
It's still a speculative and admittedly-expensive company, but its drug-development platform is viable. This chart of IMMU can be taken at face value... the tide has turned, yet there's still plenty of room to keep rallying.
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