Already a swift mover and big winner for investors this year, Immunocellular Therapeutics (IMUC.OB) may still have enough short to mid term catalysts on the horizon to propel shares even higher. A financing deal announced early in the year restocked the company's war chest with cash and exposed the fact that institutional interest in the company is growing, just as the Phase II glioblastoma trial for ICT-107 progresses on schedule.
Up until this point it has chiefly been the potential of Immuncellular's technology and pipeline that has garnered most of the news headlines for Immunocellular. That technology, by attacking cancer stem cells to prevent the spreading and growth of cancer, has already proven in early studies that it may be superior to the current standards of immunotherapeutic cancer care. Immunocellular's technology also comes with certain logistical advantages that position ICT-107 and other future Immunocellular treatments to be far less expensive than comparable treatments, as outlined in a recent company presentation.
The potential for more attractive pricing is a note not to be ignored, as it was concerns of pricing and reimbursement that led to a collapse of Dendreon's (DNDN) share price last summer and caused a sector-wide panic. Provenge sales were slumping badly and underwhelmed investors, analysts and even company officials, when comparing sales numbers to previous estimates, but the advantages of IMUC's manufacturing processes may alleviate the risk of having to face similar obstacles.
These pipeline notes and advantages have been well documented, but IMUC is also starting to gain some momentum from other factors.
The institutional interest resulting from the early-year financing deal created some much-needed buzz, as Ayer Capital Management - a big player in the healthcare sector - took a seven percent position in the company. Ayer's holdings currently include (or have previously included) Teva (TEVA), Dendreon (DNDN), Celgene (CELG) and Oncothyreon (ONTY), so seeing those guys jump into IMUC with such a significant position added an air of credibility, and most likely played a major factor in the recent push to two dollars. Such an investment by a large fund could also spark the confidence of investors who might otherwise still be sitting on the sidelines waiting for other 'catalysts of confidence' to play out.
The recent spike in hte IMUC share price has the stock trading for nearly double the opening prices of the new year. With that being the case, it's now also worth discussing the possibility that a move to one of the bigger trading boards might be in the works. Many investors, both private and institutional, won't touch stocks that trade on the OTC markets, and a move to the AMEX would provide another big layer of credibility for IMUC to those investors or funds that consider the OTC too risky to touch.
Such a move to one of the big boards would also draw interest to the fact that Immunocellular carries no debt, a huge plus for the more-cautious speculative investors, and - as a result of January's financing deal - has enough cash on hand to last well into 2013, far beyond the expected time frame for the initial releases of results from the Phase II trial. By that time Immunocellular might be flying high as a solid buyout candidate, given the fact that big players in the industry are increasingly looking to scoop up smaller companies earlier in the stages of pipeline development. The buyout speculation will only grow that much more if interim results for ICT-107 in Phase II, due out late this year, are as encouraging as earlier results were.
As the push to breach and sustain the two dollar mark continues, look for factors outside of just the pipeline to start playing a larger role in the IMUC price movement. Growing institutional interest not only validates the Immunocellular pipeline, but it also validates the potential for short and mid term price movements, as evidenced by the early-year run. Talk of a potential buyout and move to a bigger trading board for IMUC should continue, and both are possibilities to be respected when assessing a potential investment in IMUC.
Results from the Phase II ICT-107 trial are not expected to start trickling in until later this year, but - as noted above - there are plenty of other catalysts on the horizon that have the potential to move the IMUC share price. Keep an eye out for some of those developing stories, and also keep in mind that any continued rebound by Dendreon that indicates a broader acceptance of the technology could spark an influx of fresh money into the cancer immunotherapy sector as a whole.
Disclosure: Long IMUC.