Maxim Group Downgrades ImmunoCellular Therapeutics (IMUC) to Hold
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Maxim Group downgraded ImmunoCellular Therapeutics (NYSE: IMUC) from Buy to Hold.
Analyst Jason McCarthy highlighted:
- IMUC reported 3Q16 with a net loss of $4.8M and ended the period with $15.3M in cash. With operating expenses of $6M per quarter, we estimate the company has sufficient funding well into 2017. In addition, funds from what remains of the $19.9M CIRM grant could further extend the cash runway and are payable based on enrollment milestones. However, the speed of enrollment has been slower than expected. As a result, IMUC has made adjustments to the trial protocol that may help increase the rate of enrollment. The changes will result in a larger study population, extend the timeline to data, and increase costs—all at a time when the biotech market is constrained and raising capital for emerging growth companies is challenging. As such, we believe it's prudent to step our rating down to a Hold.
- What happened? Due to slower-than-expected enrollment, IMUC reduced the time for screening out patients that have early disease progression with the goal of speeding up enrollment. In order to not sacrifice powering, total patient enrollment must be increased to 500 patients, from 414. Time to complete enrollment is pushed back to 2019, from late 2017, and time to data is pushed back to 2021/2022, from 2020. The net result is commercial launch pushed back to 2023, from 2021.
- Conclusion. We continue to believe that ICT-107 could be a viable therapy in glioblastoma based on MOA and prior phase II data. However, difficulty enrolling patients and the resulting delays in timelines stemming from a modified trial protocol are a concern. As such, we believe it is prudent to step to the sidelines and lower our rating to a Hold (from Buy) and remove our price target.
Shares of ImmunoCellular Therapeutics closed at $0.09 yesterday.
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