Immunovant stock slumped Thursday — reversing a day-earlier jump — after pivoting its focus to what one analyst called "a backup compound."
The company's most advanced drug in clinical testing is batoclimab, which is being studied in patients with myasthenia gravis, thyroid eye disease and other conditions. But Immunovant said late Wednesday it would shift its focus to IMVT-1402, a drug in earlier-stage testing that uses the same mechanism as batoclimab, but appears to be safer.
Leerink Partners analyst Thomas Smith says the rationale makes sense. Immunovant plans to begin four to five key studies of IMVT-1402 over the next year. The company also delayed the results of two Phase 3 studies of batoclimab until 2025.
"Overall, we view the shift in timelines as prudent, enabling Immunovant to capitalize on the enhanced clinical profile of '1402 while leveraging proof of concept and clinical learnings from the ongoing studies of batoclimab," Smith said in a report.
But on the stock market today, Immunovant stock tumbled 10.7% to 26.41.
Immunovant Stock Reverses Lower
Both of Immunovant's drugs aim to lower levels of an autoantibody called immunoglobulin G, or IgG. They do this by blocking a specific receptor known by the shorthand FcRn. Argenx is the pioneer in the class with its drug Vyvgart.
"They've done a lot and we will do more," Immunovant Chief Executive Pete Salzmann told Investor's Business Daily in an interview early this month, referring to Argenx. He says Immunovant's formulation allows the company to lower IgG even further, but without resorting to massive doses.
In September, Immunovant said patients who received IMVT-1402 had up to 63% lower levels of IgG after four weekly doses. Importantly, that was in line with a similar dose of batoclimab, but didn't lead to any increases in LDL cholesterol or a blood plasma protein called albumin. Batoclimab recipients had increases in both. Immunovant stock catapulted 97% that day, while Argenx stock fell 5%.
On Wednesday, the company officially switched to IMVT-1402 as its lead asset over batoclimab.
William Blair analyst Matt Phipps says the Immunovant move highlights Argenx's lead in the class. Also of note, Biohaven said Wednesday its rival drug reduced IgG levels by up to 37%. The results lagged expectations and Biohaven stock plunged. Biohaven uses a different mechanism to degrade IgG. Argenx and Immunovant stocks jumped Wednesday.
"Overall, these updates continue to highlight (Vyvgart's) development lead and maintain Argenx's pole position in the FcRn/IgG-lowering field, in our view," he said in a client note.
He doesn't have a rating on Immunovant stock, but rates Argenx shares a market perform.
Moving Onto IMVT-1402
Leerink's Smith remained bullish on Immunovant stock, however.
The company expects to begin a study of IMVT-1402 in patients with myasthenia gravis by the end of the first quarter. Myasthenia gravis is a chronic autoimmune disorder that destroys communication between the nerves and muscle, resulting in weakness.
Immunovant also plans to delay a readout of batoclimab in patients with CIDP, or chronic inflammatory demyelinating polyneuropathy, by about two quarters. CIDP is a neuromuscular disorder that impacts the arms and legs. The company is now planning a study of IMVT-1402 in CIDP treatment.
"We believe a broad update across Immunovant's neurology programs (MG and CIDP) could come in early 2025, including batoclimab data and potential pivotal plans for '1402 in both (diseases)," he said.
Smith has an outperform rating on Immunovant stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
