Prima BioMed Ltd (PBMD) Gains as Analyst Sees Over 400% Upside

Prima Biomed (NASDAQ: PBMD) is trading up 12.6% in pre-open trade Thursday after Roth Capital initiated coverage on the stock with a Buy rating and aggressive $6 price target, suggesting 441% upside to yesterday's close.

Analyst Joseph Pantginis sees Prima Biomed in a leading position in the development of new checkpoint inhibition pathways, based on the discovery of LAG-3 by Prima's CMO/CSO.

After flailing around for the past few years amid mixed results for CVac and management upheaval, Pantginis says the company has now been transformed under the leadership of CEO Marc Voight and especially with the October 2014 acquisition of Immutep.

LAG-3 is a major factor involved in the regulation of T-cells in immune responses, the analyst highlights. The company is now entirely focused on the LAG-3 program and in February 2015 announced that it was no longer enrolling CVac studies and the product is now available for partnering.

Pantginis notes the key driver for the Immutep acquisition and the promise of LAG-3 is Professor Frederic Triebel, Prima’s current CMO/CSO, who founded Immutep and discovered the gene in 1990 and conducted work in tandem with Institut Gustave Roussy (IGR) and Merck-Serono. Additionally, he co-discovered the dendritic cell activation properties of soluble LAG-3 in 1999.

The formation of Immutep in 2001 led to the development of three drug candidates, each with independent properties to target the LAG-3 pathway, two of which have been partnered with GlaxoSmithKline (GSK-NC) and Novartis (NVS-NC), according to the analyst. During the developmental years of Immutep, it was a small venture backed company with limited resources, so they view the cash infusion by Prima as instrumental in bringing LAG-3 to the forefront as a next leading checkpoint molecule.

"We believe Prima is establishing a leadership role in immunotherapy and look at LAG-3 as a key new checkpoint inhibitor target," analyst Joseph Pantginis said in his note after the close. "We believe the approach has further been validated by having partnerships with two global pharmas. We recommend building positions."

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