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Coverage Initiated on Immunotherapy Developer with Phase 3 Lead Asset
Research Report

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A B. Riley FBR report provided an overview of this life sciences firm.

In a June 6 research note, analyst Madhu Kumar indicated B. Riley FBR initiated coverage on Immunomedics, Inc. (IMMU:NASDAQ), which is developing antibody drug conjugates for treatment of various cancers. One, its lead asset, is IMMU-132, or sacituzumab govitecan, targeting solid cancers.

B. Riley assigned the company a Buy rating and a 12-month price target of $53 per share, which is roughly double the current share price of $24.34. The investment bank also switched its Alpha Generator Pick to Immunomedics "due to our high conviction that antibody drug conjugate IMMU-132 can disrupt multiple solid cancers," Kumar added.

A significant catalyst for Immunomedics anticipated by year-end 2018 is the U.S. Food and Drug Administration making a regulatory decision on the use of IMMU-132 in third-line or triple-negative breast cancer (3L TNBC), the company's lead clinical program.

The biologics license application for IMMU-132 on file with the FDA has been derisked in large part by Phase 2 study results and its breakthrough therapy designation. In the clinical trial, IMMU-132 achieved "striking clinical efficacy in 3L TNBC, with a 34% objective response rate, median progression-free survival of 5.5 months and median overall survival of 12.7 months," relayed Kumar. "This degree of therapeutic response vastly exceeds existing therapeutic agents in 3L TNBC."

The Phase 2 data bode well for the results of the Phase 3 ASCENT trial currently underway and the regulatory review, Kumar noted. About IMMU-132, he concluded, "Taken as a whole, we consider IMMU-132 a potential best-in-class agent antibody in 3L TNBC with the potential for commercial launch by early 2019." Further, B. Riley estimated IMMU-132 has a 90% chance of being launched and modeled risk-adjusted sales for 3L TNBC of $2.6 billion by year-end 2030.

Along with 3L TNBC, other pipeline IMMU-132 targets include earlier-line TNBC, advanced urothelial cancer, nonsmall cell lung cancer, small cell lung cancer and third-line, hormone receptor-positive/HER2-negative breast cancer (3L HR+/HER2– BC).

Kumar pointed out the market underestimates IMMU-132's potential in other indications, particularly 3L HR+/HER2– breast cancer and advanced urothelial cancer, in which there is a large unmet need. Expansion of IMMU-132 into these two indications in particular "could drive substantially greater upside to our IMMU price target," wrote Kumar.

Specifically, Kumar outlined the following estimated NPVs and projected sales of IMMU-132 in Immunomedics' other target cancers:

1. Third-line HR+/HER2– breast cancer: a $14.41 per share NPV, a commercial launch by year-end 2021 and risk-adjusted sales of $1.9 billion ($1.9B).

2. Advanced urothelial cancer: a $13.47 per share NPV, a commercial launch by year-end 2021 and risk-adjusted sales of $1.8B.

3. Earlier-line TNBC: a $1.41 per share NPV, sales by year-end 2030 of $210.6 million ($210.6M).

4. Nonsmall cell lung cancer: a $0.48 per share NPV, sales by year-end of $72.1M.

5. Small cell lung cancer: a $0.20 per share NPV, sales by year-end 2030 of $30M.

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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from B. Riley FBR, Immunomedics Inc., June 6, 2018

Company-Specific Disclosures For up-to-date B. Riley FBR company disclosures, please click on this link.

Information about the Research Analyst Responsible for this report: The primary analyst(s) covering the issuer(s), Madhu Kumar, Ph.D., certifies (certify) that the views expressed herein accurately reflect the analyst's personal views as to the subject securities and issuers and further certifies that no part of such analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the analyst in the report. The analyst(s) responsible for this research report has received and is eligible to receive compensation, including bonus compensation, based on B. Riley FBR’s overall operating revenues, including revenues generated by its investment banking activities.

Information about B. Riley FBR's Conflicts Management Policy: B. Riley FBR’s Research conflicts management policy is available at:

Information about investment banking: In the normal course of its business, B. Riley FBR, or any of their affiliates seek to perform investment banking and other services for various companies and to receive compensation in connection with such services. As such, investors should assume that B. Riley FBR, or any of their affiliates intend to seek investment banking or other business relationships with the companies covered in their research reports.

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