Analysts bullish on Immunomedics after short report on manufacturing issues

Commenting on today’s weakness in Immunomedics (IMMU) shares, Wells Fargo analyst Jim Birchenough told investors that he believes the stock came under “significant” pressure on apparent concerns regarding potential observations at the company’s manufacturing facility and implications for approval of its antibody drug conjugate therapeutic sacituzumab govitecan. However, the analyst argued that the observations appear to be “old news” and that Immunomedics remains confident in sacituzumab approval odds. Voicing a similar opinion, his peer at Guggenheim added that the weakness on FDA Form-438 worries has been “overdone.”

WEAKNESS IN SHARES ‘OVERDONE’: In a research note to investors, Wells Fargo’s Birchenough attributed Thursday’s pressure on Immunomedics shares to concerns regarding potential observations at the company’s manufacturing facility and implications for approval of sacituzumab govitecan for triple negative breast cancer by its PDUFA date of January 18. However, after speaking to management, the analyst said they indicated that the Food and Drug Administration’s observations occurred as part of a pre-approval inspection in early August, are “old news” and that a remediation has long been put in place. He added that the company “appears confident” in the prospects for approval of sacituzumab govitecan and reiterated an Outperform rating on the shares. Voicing a similar opinion, Guggenheim analyst Michael Schmidt told investors in a research note of his own that he views Thursday’s weakness in Immunomedics’ stock following a short report that highlighted the company’s receipt of an FDA Form-483 on manufacturing issues regarding sacituzumab as “overdone.” The analyst also reiterated a Buy rating on the shares. Also commenting on the short report, Morgan Stanley analyst Matthew Harrison said he appreciates the concern in the market, given that investors have been worried about manufacturing issues potentially impacting the approval of IMMU-132. However, Harrison noted that he still believes there is a higher probability of approval than not on the PDUFA. The analyst reiterated an Overweight rating and $38 price target on Immunomedics’ shares.

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