Immunic (NASDAQ:IMUX) is a good speculative biotech play to look into, because it recently reported positive results from part C of the phase 1 trial, which used IMU-856 for the treatment of patients with Celiac Disease. Not only were positive results released from this study with respect to four key measures, but it was also noted that this drug may provide a new therapeutic treatment approach in targeting many types of gastrointestinal disorders. Based on this data, the company established proof of concept using IMU-856 for Celiac Disease. In the last article I wrote about Immunic, under the title of “Immunic: Multiple Sclerosis Data In H2 2023 Could Provide A Major Shift“, I noted that it was to release Celiac Disease data in 2023, which it accomplished as noted above. In addition, I also highlighted that the company would decide upon whether or not it would want to advance IMU-935 for the treatment of patients with psoriasis. Well, it had decided to shift its focus on its Multiple Sclerosis and Celiac Disease programs going forward. It not only abandoned the use of IMU-935 for the treatment of patients with psoriasis, but it also chose to abandon the use of this drug for the treatment of patients with prostate cancer as well. Speaking of the MS program, it still anticipates that it will report results from the phase 2 CALLIPER trial in the 2nd half of 2023. This mid-stage study is using Vidofludimus Calcium to treat patients with Progressive Multiple Sclerosis. Topline results from this trial are expected to be released at the end of 2024. All of these advancements, along with the moving forward of the ENSURE program, which is using Vidofludimus Calcium to treat patients with relapsing multiple sclerosis. Interim results from the first of the two late-stage studies from this program are expected in late 2024, with final results by the end of 2025. With positive proof of concept in using IMU-856 for Celiac Disease, plus a major data readout expected in the 2nd half of 2023 from the phase 2 CALLIPER study, these are the reasons why I believe that Immunic is a good speculative biotech play to look into.
Proof Of Concept Of IMU-856 For Treatment Of Patients With Celiac Disease Established
The good thing about Immunic is that it has already been able to establish proof of concept in being able to treat patients with Celiac Disease, using IMU-856. It is expected that the global Celiac Disease market could reach $1.6 billion by 2029. Since the last time I wrote about Immunic, I noted that it was to release results from Part C of the phase 1 study, using IMU-856 for the treatment of patients with Celiac Disease. Well, not only were the results from this study released, but it was noted to be a positive outcome. In that IMU-856 was shown to modulate the protein SIRT6 [Sirtuin 6], which is important because it helps regulate the function of the intestinal barrier and also helps to regenerate the bowel epithelium. Such results, were presented on a virtual e-poster at Digestive Disease Week [DDW] 2023, which was held on Tuesday May 9, 2023. In essence, IMU-856 was shown to modulate, stabilize and enhance expression of the SIRT6 protein, all of which provides a huge boost to a patient’s gastrointestinal tract. In prior released data, IMU-856 was shown to also established four beneficial effects of celiac disease pathophysiology, which were as follows:
- Disease Symptoms
- Nutrient absorption
All of this data was obtained with the use of IMU-856 compared to placebo. While the MS program is a key staple of Immunic as a biotech, this Celiac Disease programs seems to be shaping up well. However, there are two reasons why I believe it is important to provide an update for this program. The first reason is because this biotech now has enough proof of concept on hand to initiate a phase 2b study, using IMU-856 for the treatment of patients with Celiac Disease. The second reason is because of the mechanism of action for this drug, in that it restores bowel epithelium and intestinal barrier function. Why is this second reason important? It is because there are many other gastrointestinal disorders which also cause poor internal barrier function and damaged bowel epithelium. What this means is that Immunic can potentially use IMU-856 to target other gastrointestinal disorders, expanding its market potential with this drug. For instance, it could use IMU-856 towards Crohn’s Disease, irritable bowel syndrome with diarrhea, and ulcerative colitis as well. Management has stated that even though it is first advancing IMU-856 in a phase 2b study in treating patients with Celiac Disease, they are also possibly considering to go after these other indications. The bottom line here is that this drug might be versatile enough to be used against other gastrointestinal disorders.
According to the 10-Q SEC Filing, Immunic had cash, cash equivalents and investments of $97.1 million as of March 31, 2023. It believes that it has enough cash to fund its operations into Q4 of 2024. The company has been using several At-The-Market [ATM] agreements to raise cash to keep its pipeline funded. Since inception of this company until March 31, 2023 it raised net cash of $355.6 million from private and public offerings of preferred and common stock. As I noted directly above, it has been deploying several ATM agreements to keep its pipeline funded. The most recent ATM agreement was done with SVB Leerink back in May of 2022. That is when it filed a prospectus supplement offering to issue the sale of up to a maximum aggregate offering price of $80 million of common stock with SVB Leerink as the selling agent. There are two pieces of good news relating to all these ATM agreements. The first piece of good news is that as of May 2, 2023, $80 million in capacity remains under this May 2022 ATM agreement with SVB Leerink. The second piece of good news is that with the three months ending March 31, 2023, no sale occurred under any of these ATM agreements. With cash expected to last into Q4 of 2024, I believe that in the coming months it is going to need to start finding a way to raise cash. I believe that, should the interim results from the phase 2 CALLIPER study using Vidofludimus Calcium to treat patients with Progressive Multiple Sclerosis turn out to be positive, then it will likely enact a cash raise almost immediately. Matter of fact, I believe that it will choose to raise cash the very same day.
Risk To Business
There are several risks that traders/investors should watch out for when investing in Immunic. The first risk to consider would be with respect to the upcoming release of interim results from the phase 2 CALLIPER study, which are expected to be released by the 2nd half of 2023. Even though Immunic established proof of concept in the phase 2 study using this drug to treat relapsing remitting multiple sclerosis [RRMS] patients, there is no guarantee that it will also be successful in treating progressive multiple sclerosis [PMS] patients. A second risk to consider would be with respect to the use of IMU-856 for the treatment of patients with Celiac Disease. Even though initial proof of concept has been established in several parts of the phase 1 study with this drug for this patient population, there is no guarantee that such data will be replicated in the phase 2b study, once that is initiated. The final risk to consider would be based on the financials that are in place. Immunic believes that it has enough cash on hand to fund its operations into Q4 of 2024. With that said it has a bit more than one year’s worth of cash. Based on this estimate, I believe that it will need to raise additional cash in the coming months. Again, I think it may choose to do so if the stock price rises on the back of positive interim results from the phase 2 CALLIPER study.
The final conclusion is that Immunic is a good speculative biotech play to look into. That’s because it has been able to establish initial proof of concept in being able to use IMU-856 for the treatment of patients with Celiac Disease. With such initial proof of concept established with IMU-856 for the treatment of this patient population it intends to initiate a phase 2b study for the treatment of this patient population. My belief is that should this program be successful, it may provide enough proof of mechanism of action so that IMU-856 can be used against other gastrointestinal disorders. In addition, it has already been able to provide proof of concept in using Vidofludimus Calcium to treat patients with RRMS in a phase 2 study. So much so, that it has already advanced the phase 3 ENSURE program using this drug to treat the RRMS patient population. This program is going to entail two phase 3 studies targeting this specific patient population being treated with Vidofludimus Calcium. Interim results from the ENSURE program are expected in late 2024. With final results from the first of the ENSURE trials expected by the end of 2025. With proof of concept established in using IMU-856 for the treatment of patients with Celiac Disease, plus several data readouts expected over the next few years using Vidofludimus Calcium for MS, these are the reasons why I believe that Immunic is a good speculative biotech play to look into.
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