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Topline overview and latest information
IGM Bioscience (Nasdaq:IGMS) is a biotechnology company working on developing different classes of antibodies in hopes of improving various parameters used in the widely used classic IgG antibodies. Compatible with various conditions.Inside me Previous article, despite the possibility of a catalytic surprise in 2024, I didn’t think their investment thesis was worth entry at the time. So far, IGMS has gone through a rapid rise and fall before settling into what appears to be a holding pattern. It’s time to reevaluate.
Pipeline updates
As explained in detail in first article As prepared by IGMS, the company’s main claim to fame is that its immunoglobulins are a different isotype from those widely used in oncology, rheumatology, and other therapeutic areas since the late 1990s. is to develop. In particular, the “M” isotype is There is more potential for ligand binding, which could potentially make the target available with less expression.
In the past, these molecules big and complicated Therefore, IgM monoclonal antibodies have never been approved for the treatment of any disease. IGMS hopes to change this with Pipeline.
app tabart
The most advanced tumor-related project in development at IGMS is an IgM monoclonal antibody called aplitabart. This molecule is designed to bind to death receptor 5 (DR5). important role Initiate programmed cell death and block this molecule is shown Works synergistically with chemotherapy in vitro Cancer research.
Aplitabat is currently the subject of a randomized clinical trial in patients with metastatic colorectal cancer. Patients who progressed on one previous therapy will be randomly assigned to receive FOLFIRI and bevacizumab (one of the standard second-line treatment options) alone or in combination with apritavert. The primary endpoint of this study was progression-free survival; IGMS estimates Its top-line results should be ready for publication by the end of the first quarter of 2025. Another arm of the study testing high-dose apritavert also met its enrollment goal.
Some discoveries have been made so far via press release Full data readout is a key point for the aplitabart project, as the CRC shows promising activity with this combination.
inbotamab
IGMS is also working on a bispecific T-cell engager called inbotamab, which is designed to bind both CD20 and CD3 simultaneously. Remember that CD20 is a marker for B cells that play an important role in inflammation. Therefore, engaging and activating CD3+ T cells may help downregulate aberrant immune responses and lead to amelioration of autoimmune diseases.
Inbotamab is currently being given a triple dose of iron, as IGMS is conducting trials (scheduled to begin soon) in patients with rheumatoid arthritis, severe systemic lupus erythematosus, and myositis. Data from these studies are not yet available. There is also no official guidance on when data will be available from IGMS. The clinical trial website states that the primary completion date for the rheumatoid arthritis Phase 1b trial is February 2025, but this is not necessarily an indication of when data is expected.
The company also has an ongoing cooperation agreement with Sanofi (SNY) Develop IgM antibodies. Although it is still ongoing, back in april, SNY has discontinued development in the oncology field, choosing to focus solely on immunological conditions. Even without an oncology partnership, this partnership could result in approximately $1 billion in milestone payments during the development process. However, this is dependent on whether the pair designates and pursues the molecule for further clinical development, which is not yet guaranteed.
Financial overview
At their time, 2024 Q1 Financial Report, IGMS had current assets of $302.8 million, including $79.2 million in cash and equivalents and an additional $214.6 million in marketable securities. Operating expenses for the quarter were $53.9 million, and after deducting interest income, IGMS recognized a net loss of $49.8 million. This was a decrease of approximately $10 million compared to the prior year period, primarily due to reductions in research and development and administrative expenses.
At this cash burn rate, IGMS is estimated to have a lifespan of 5-6 quarters, and it would take about a year before cash becomes a serious problem.
Strengths and risks
Strengths – Sufficient cash position to continue to focus
IGMS does not have an immediate funding crisis, which will give its various programs time to mature and hopefully provide some clarity on where to focus its efforts going forward. His Q1 2025 results of the company’s CRC trial are a notable inflection point to expect (for better or worse), and their cash position should easily get there without any problems. .
Risk – Aplitabart project is in a dangerous disease area
Metastatic colorectal cancer is notoriously difficult to treat, and IGMS’ most advanced projects are currently underway. Her more than 100 patients enrolled in the randomized clinical trial should be enough to give a clear signal whether Aplitavert is effective. By adding something to standard second-line treatments, data catalysts can make or break entire projects.
Unfortunately, colorectal cancer has a history of knocking down promising projects, so the hype around this program has a high bar to clear, so invest with caution.
Risks – Partnering with Sanofi is far from a guarantee of safety
You would hope that a partnership with a large pharmaceutical company would provide some support for pressing financial issues. Unfortunately, the news that SNY is terminating some of its partnerships bodes poorly for the long-term prospects of the overall deal. That could still come to fruition, but this is an indication of what SNY will do the moment it no longer sees value in collaboration. This creates a cloud of uncertainty over the head of an IGMS that should have some level of security.
Summary of key points
With a market cap of nearly $600 million, this early-stage company still doesn’t seem like a bargain to me. Their most advanced projects are in very high-risk/high-reward disease areas, with other pipeline projects still in the very early stages of development. The next data read won’t happen until early next year, and that’s when cash burn will start to become a serious concern. Of course, if App Tabart generates very promising data in a randomized trial, it may be able to raise money from a favorable position. But given how many trial failures we’ve seen over the years, we caution against making big bets based on success in metastatic colorectal cancer.
In terms of a buy-now decision, I see IGMS as likely to be in a holding pattern at best. With no clear near-term catalyst in play, the company could trade sideways or even trickle in value until the market starts to take notice again in late 2024, when a CRC catalyst is expected. I think there is. Therefore, given the likely short-term decline in the stock price, I maintain a ‘sell’ rating here, but will have to reconsider later this year.
