Broker sees substantial upside in Immuron with catalysts imminent
Immuron (ASX:IMC and NASDAQ:IMRN) is developing next-generation therapeutics derived from bovine colostrum, the so-called ‘first milk’ that is produced immediately after calving with the purpose of providing crucial elements of immune system protection to the newborn calf.
Acknowledging colostrum is such a rich source of immunomodulatory molecules, particularly polyclonal antibodies, which can have specific therapeutic properties, Raghuram Selvaraju, an analyst with New York-based research house, HC Wainwright & Co has initiated coverage of Immuron (ASX:IMC and NASDAQ:IMRN) with a buy recommendation and a share price target of US$15, a premium of 185 per cent to its current NASDAQ price of US$5.27.
It should be noted here that broker projections and price targets are only estimates and may not be met and share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.
Selvaraju recognises the company’s prospects, particularly given the size of its target markets.
IMC has two clinical-stage candidates, one of which is IMM-124E, which is being aimed at liver diseases including non-alcoholic steatohepatitis (NASH) and non-alcoholic fatty liver disease (NAFLD).
The other key component of its portfolio is IMM-529, which is targeting Clostridium difficile-related infections (CDI), a hospital-acquired or non-socomial infection associated with multi-drug resistance.
IMC’s early-stage preclinical pipeline also comprises programs targeting central nervous system (CNS) diseases and neuropsychiatric conditions such as autism spectrum disorder (ASD) and other infections, including those caused by pathogens like Campylobacter and Shigella.
IMM-124E a possible company maker
While Selvaraju views the market opportunities for both IMM-124E and IMM-529 as substantial, he noted the former is by far the larger of the two markets with NASH alone projected to reach over US$25 billion annually by 2026 with a compound annual growth rate (CAGR) averaging 45 per cent over the next 10 years.
The analyst believes that peak sales could exceed US$1.8 billion, which conceivably would only be achievable with the assistance of a partner. However, he noted that IMC could self-commercialise IMM-529, a development that could deliver sales of US$180 million in a 2033 timeframe.
In terms of share price traction there are some interesting developments on the horizon. Selvaraju highlighted the fact that IMC is slated to report final topline data from the proof of concept Phase 2 NASH trial of IMM-124E within the coming weeks.
Given the company’s sub-$15 million enterprise value he believes the market currently gives IMC no credit for the program, suggesting even a hint of effectiveness in the trial could provide a substantial boost to the stock.
The following is a list of other catalysts compiled by Selvaraju that could provide share price momentum through to the second half of 2018, with the analyst having flagged the level of importance attributed to each event.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of Maven Capital Pty Ltd (AFSL No. 418504). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.