Immunovant stock dipped Wednesday after the drugmaker announced a $300 million offering on the heels of promising test results for an autoimmune disease treatment.
The company plans to offer a total $300 million in common stock through a public offering and a private placement. That includes $130 million in common stock. Immunovant will also give the underwriters a 30-day option to buy up to $19.5 million in shares.
On the stock market today, IMVT stock initially jumped as high as 10.6%, hitting 44.19. But shares later reversed and closed down 1.1% at 39.52. Previously, shares closed up 97% on Tuesday. Immunovant unveiled promising test results for a next-generation method of blocking an antibody tied to numerous autoimmune diseases.
IMVT Stock: A Shot At Rivaling Vyvgart
Immunovant tested several doses of its drug, dubbed IMVT-1402, in healthy adults. The under-the-skin injection led to dose-dependent reductions in immunoglobulin G, or IgG, a protein tied to a number of autoimmune conditions.
Promisingly, Immunovant's newest IgG-lowering drug didn't lead to increases in "bad" LDL cholesterol or albumin, a protein made by the liver. Heightened levels of albumin can signal a patient is dehydrated or experiencing diarrhea. An earlier drug from Immunovant caused increases in both.
The results could put Immunovant in line to rival Argenx's Vyvgart, and Argenx stock skidded Tuesday.
Both drugs lower IgG with the hopes of treating autoimmune conditions tied to it. Vyvgart is already approved for generalized myasthenia gravis, a condition that impacts the skeletal muscles. It also has shown promise in a neurological condition called chronic inflammatory demyelinating polyneuropathy.
But Wedbush analyst David Nierengarten kept his outperform rating on Argenx stock. He doesn't cover IMVT stock. But he noted a 300-milligram dose of Immunovant's shot given weekly for four weeks resulted in a 63% reduction in IgG. In comparison, Vyvgart delivered by an under-the-skin injection led to a 66.4% cut in the antibody.
"We note that (Vyvgart) also did not affect serum albumin levels," he said in a note to clients. "We do not see IMVT-1402 as a competitive entrant in the generalized myasthenia gravis market in the near-term."
'Multiple De-Risking Opportunities'
But Leerink Partners analyst Thomas Smith boosted his price target on IMVT stock to 47 from 29. The results Tuesday remove an overhang for Immunovant, allowing it to compete against others in the same class. He noted Immunovant is also testing a higher dose of its drug.
All together, Smith expects Immunovant's two IgG-lowering drugs to generate $2.7 billion in sales by 2035.
"Following today's data, we continue to see IMVT shares as an attractive pure-play on the burgeoning (drug) class, and see a robust catalyst path with multiple de-risking opportunities that could further enhance the fundamental and strategic value of the franchise in the next 12 months," he said in a note.
He kept his outperform rating on IMVT stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
