Shares of Immunomedics (IMMU) are in the spotlight on Wednesday after the company announced that the Food and Drug Administration approved Trodelvy for the treatment of adult patients with metastatic triple-negative breast cancer, or TNBC, who have received at least two prior therapies for metastatic disease. Commenting on the news, Wells Fargo analyst Jim Birchenough said he sees “significant upside” following the earlier than expected decision.
ACCELERATED APPROVAL: Immunomedics announced that the U.S. Food and Drug Administration has approved Trodelvy for the treatment of adult patients with metastatic triple-negative breast cancer, or TNBC, who have received at least two prior therapies for metastatic disease. "Trodelvy is the first ADC approved by the FDA specifically for relapsed or refractory metastatic TNBC and is also the first FDA-approved anti-Trop-2 ADC," the company said.
Trodelvy carries a black box warning for severe neutropenia and severe diarrhea. The most common adverse reactions occurring in 25% or more of patients included nausea, neutropenia, diarrhea, fatigue, anemia, vomiting, alopecia, constipation, decreased appetite, rash and abdominal pain. The most common Grade 3 or 4 adverse events occurring in more than 5% of patients were neutropenia, white blood cell count decreased, anemia, hypophosphatemia, diarrhea, fatigue, nausea and vomiting. 2% of patients discontinued treatment due to adverse events.
The company recently announced that the Phase 3 confirmatory ASCENT study of Trodelvy in metastatic TNBC, with over 500 patients enrolled, will be stopped early due to compelling efficacy across multiple endpoints, based on the unanimous recommendation of the DSMC. Additionally, Immunomedics said it remains on track to achieve topline results from the ASCENT study by mid-2020.
'SIGNIFICANT UPSIDE': Wells Fargo analyst Jim Birchenough reiterated an Overweight rating on Immunomedics following approval of Trodelvy for metastatic triple-negative breast cancer. With positive ASCENT data and an unmet need, the analyst sees "significant upside" on the earlier than expected approval with further upside into bladder cancer, ER+ breast cancer and other solid tumors. Beyond metastatic breast cancer, Immunomedics continues to evaluate sacituzumab govitecan across eight solid tumor cancers, Birchenough noted.
Earlier this month, the analyst had upgraded the stock to Overweight from Equal Weight with a price target of $34, up from $12. At the time, Birchenough cited positive results for the ASCENT confirmatory study of sacituzumab govitecan in triple negative breast cancer. With the early study halt for compelling efficacy across several endpoints, a significant overhang around sacituzumab govitecan approval had been lifted, he contended.
WHAT'S NOTABLE: Back on April 3, Goldman Sachs analyst Paul Choi double downgraded Immunomedics to Sell from Buy with a price target of $5, down from $24. The analyst noted that a Form 483 was published detailing ten observations of quality control, procedural, maintenance and other issues observed during the FDA's most recent inspection of the company's Morris Plains, NJ facility. Based on this, Choi said he thought it is unlikely that Immunomedics' sacituzumab govitecan would be approved at its June 2, 2020 FDA action date for triple negative breast cancer. Choi found it unclear whether Immunomedics would be able to address these concerns adequately, and was cautious on the company's ability to execute on the other ongoing clinical studies without the revenue generated in triple negative breast cancer.
PRICE ACTION: Shares of Immunomedics were up over 1% at $21.97 before being halted on Wednesday morning in advance of confirming the FDA approval news. At time of writing, the stock remains halted for trading.
