Immunocore is the IBD Stock Of The Day as expectations for triple-digit sales growth and future profits drive the biotech stock close to a record high.
The company sells just one product, a treatment for a form of melanoma. Its drug works by finding cancer cells through a specific genetic mutation. Then, the drug summons a killer T cell to destroy the tumor. Immunocore's drug, Kimmtrak, was the first new option for patients with this type of melanoma in four decades, Chief Executive Bahija Jallal said.
"We're fulfilling an unmet medical need," she told Investor's Business Daily. "This is not an incremental effect. It's really transformative. We are basically increasing the overall survival for patients."
In addition to its branded drug, Immunocore is also working on six other treatments using the same tech, known as T-cell receptor-based therapy, or TCR therapy. The company hopes to treat multiple forms of cancer as well as autoimmune and infectious diseases.
Now, the biotech stock is trending sideways after briefly breaking out last month.
Biotech Stock Soars 233% Off A Bottom
Immunocore was founded in 2008 and began trading after its initial public offering in February 2021. After hitting a low point last January, the biotech stock has ratcheted about 233% higher.
Kimmtrak, which gained Food and Drug Administration approval in January, treats metastatic uveal melanoma in patients with a specific genetic mutation. In this type of melanoma, cancer cells can travel through the blood to form tumors in other parts of the body.
Specifically, Kimmtrak belongs to a class of drugs known as bispecifics. These drugs attach to two molecular targets in the body. In the case of Kimmtrak, one side links onto the genetic mutation on the outside of the tumor. The other side brings in a T cell to destroy the tumor cell.
Immunocore estimates half of adults have the mutation susceptive to Kimmtrak. The same mutation can show up in healthy skin cells, so patients can develop rashes with this treatment.
Another drawback: The drug is a once-weekly intravenous infusion given over 15-20 minutes. For the first three doses, a patient must be observed for 16 hours due to the possibility of side effects like cytokine release syndrome. Also known as CRS, this is a systemic inflammatory syndrome. Patients can experience fever and organ dysfunction.
SVB Securities analyst Daina Graybosch recalled a conversation with a doctor in a July report to clients. He noted "time-intensive dosing and monitoring requirements were still clunky and did not create a clear convenience advantage."
She doesn't have a rating on biotech stock Immunocore.
Eventually, Jallal says the company hopes to decrease the amount of monitoring time patients require. She notes it's not unusual for a new modality to face additional safety requirements.
"We are pioneering a whole new therapeutic modality," she said. "At the beginning, you are very cautious. But as we get more data, that's going to be our goal. It's most important to keep the patients safe."
Lofty Sales Forecasts This Year
Still, the biotech stock is tracking higher on lofty expectations for 2022 sales.
This year, analysts expect Immunocore to report $157.4 million in sales. That means sales would skyrocket nearly 340% year over year. Meanwhile, analysts surveyed by FactSet project Immunocore will be profitable beginning in 2025.
Some of those expectations hinge on Immunocore's pipeline.
Beyond Kimmtrak — which the company is also studying in advanced melanoma — Immunocore is also testing four drugs in cancer. One of those is being tested in colon, gastric and pancreatic cancers. The other three are only identified as being in "multiple solid tumors." The company also is testing treatments for hepatitis B and HIV.
In September, Immunocore presented early results from a drug that targets PRAME, an antigen that shows up on some tumor cells. Jallal says PRAME is a unique target. It shows up almost exclusively on the outside of cancer cells. It rarely shows up in healthy tissue. So it's a "great candidate" for TCR drugs.
Immunocore tested the drug in 55 patients with forms of melanoma and ovarian cancer. A third of cutaneous melanoma patients partially responded, as well as half of the ovarian cancer patients. Half of the uveal melanoma patients had partial responses.
In a report, SVB Securities analyst Jonathan Chang said the test results were "encouraging and represent validation for both BRAME as a target and TCR bispecifics as a treatment modality."
He doesn't have a rating on biotech stock Immunocore, but follows its rival Immatics with an outperform rating.
Perfect Relative Strength Rating
Bearishly, Immunocore stock fell following that September presentation. Since then, the biotech stock has trended higher. Shares jumped 6.7% Friday to close at 61.36.
Shares briefly broke out of a cup base with a buy point at 61.42 in late October, MarketSmith.com shows. The stock is trading near that entry. Promisingly, Immunocore shares hold a perfect Relative Strength Rating of 99. This puts the biotech stock among the leading 1% of all stocks in terms of 12-month performance, according to IBD Digital.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
