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Analyst's 'Top Pick' Advances Vaccine Candidates
Research Report

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Douglas Loe, an analyst with Echelon Wealth Partners, provided an update on this biotech's platform pipeline targeting ovarian and blood cancers, as well as respiratory syncytial virus.

In a Nov. 10, 2017 research note, analyst Douglas Loe noted that Immunovaccine Inc. (IMV:TSX.V) "generated cumulative return of 37% since Echelon Wealth Partners' last update note. Immunovaccine is developing novel therapeutic and preventive vaccines for cancer and other serious diseases.

The report included updates on two of the company's DepoVax assets: DPX-Survivac and DPX-RSV.

For DPX-Survivac, the lipid-based, water-free injectable formulation of the cancer antigen survivin, enrollment is underway in several phase 1/2 studies. One is a 40-patient recurrent ovarian cancer study that combines DPX-Survivac with epacadostat, Incyte Corp.'s (INCY:NASDAQ) small-molecule indole 1,2-dioxygenase checkpoint inhibitor drug. "A second interim tumor response/immunological response update is expected later in FY Q4/17," Loe indicated.

Another Phase 1/2 trial is being conducted at Princess Margaret Hospital in Toronto. In this 42-patient, ovarian cancer study, DPX-Survivac is being combined with Keytruda (pembrolizumab), Merck's anti-PD monoclonal antibody drug. "Interim data from that trial [are] expected by mid-2018," Loe wrote.

In a third Phase 1/2 study, the same therapies, DPX-Survivac in combination with Keytruda (pembrolizumab), are being combined but in patients with diffuse large B-cell lymphoma. Sunnybrook Hospital in Toronto is currently enrolling 25 patients for it. Loe said interim tumor and immunological response data are likely in FY H2/18 at the earliest.

As for Immunovaccine's DPX-RSV, "development is advancing in the pipeline of a few firms, so we will be watching closely for Immunovaccine to advance DPX-RSV clinical activities imminently," Loe said. DPX-RSV is a small, B-cell epitope peptide vaccine targeting the unmet medical needs in respiratory syncytial virus (RSV).

The biotech is "actively seeking partnership interest" for the vaccine, Loe wrote. "The next steps in DPX-RSV will be expensive steps (large RSV infection avoidance studies, or perhaps even challenge studies, will need to be conducted in Phase 3), and so we agree with management's strategy to identify cash-contributing partners before investing its own capital in new DPX-RSV clinical initiatives," he added.

At the end of Q3/17, Immunovaccine had $16.6 million in cash, "corresponding [to an] existing operating loss run rate to about two years of cash," said Loe. However, development costs will likely rise, however, as the "DepoVax pipeline expands into other medical markets beyond oncology and infectious disease" and "existing programs advance into more substantive Phase 2 studies, perhaps as early as FY H2/18."

"YTD, IMV shares have generated strong returns of 125%, with 37% of this generated since our Top Pick update, and we see strong price appreciation potential on forthcoming DPX-Survivac clinical updates as described above, independent of any new pipeline advances that Immunovaccine may undertake during our forecast period. Our PT corresponds to a one-year return of 77%," Loe wrote.

Echelon has a Top Pick status, Speculative Buy recommendation and $2.75 per share price target on Immunovaccine, whose stock is currently trading at $1.63 per share.

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