Why Is Immunomedics (IMMU) Down 6.6% Since Last Earnings Report?

A month has gone by since the last earnings report for Immunomedics (IMMU). Shares have lost about 6.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Immunomedics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Immunomedics Q1 Earnings Beat, Trodelvy in Focus

Immunomedics incurred a loss of 44 cents per share in first-quarter 2020, narrower than the Zacks Consensus Estimate of a loss of 47 cents and 46 cents in the year-ago quarter.

The company did not earn any revenues in the quarter.

Total costs and expenses were $82 million in the reported quarter compared with $79.6 million a year ago, mainly due to an increase in research & development and sales & marketing expenses.

In late April, Trodelvy (sacituzumab govitecan-hziy) obtained accelerated approval from the FDA for the treatment of adult patients with metastatic triple-negative breast cancer (mTNBC), who have received at least two prior therapies for metastatic disease. Trodelvy is the first antibody-drug conjugate (ADC) approved by the FDA specifically for previously-treated mTNBC and also the first FDA-approved anti-Trop-2 ADC.

The commercial launch of the drug is underway, with the first patient treated within days of FDA approval and a National Drug Rebate Agreement with The Centers for Medicare & Medicaid Services fully executed.

As of Mar 31, Immunomedics had $540.6 million in cash, cash equivalents and marketable securities. It recently closed its previously-announced underwritten public offering of common stock with net proceeds of approximately $464.6 million.  Per the company, it has the financial ability to launch Trodelvy in the United States for mTNBC.

Pipeline Update

Based on the unanimous recommendation by the independent Data Safety Monitoring Committee during its recent routine review of the study, the phase III confirmatory ASCENT study of Trodelvy in third-line mTNBC was halted early due to compelling evidence of efficacy across multiple endpoints. Top-line data are expected around mid-2020.

Immunomedics has collaborated with the  Dana-Farber Cancer Institute to conduct two phase II studies to evaluate the safety and efficacy of combining Trodelvy with Merck’s anti-programmed cell death protein 1 (PD-1) antibody, Keytruda (pembrolizumab), in patients with mTNBC and hormone receptor positive (HR+)/human epidermal growth factor receptor 2-negative (HER2–) metastatic breast cancer (mBC).

Meanwhile, due to the coronavirus pandemic, Immunomedics proactively suspended activation of new study sites and slowed the enrollment of new patients for certain clinical studies.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 9.17% due to these changes.

VGM Scores

Currently, Immunomedics has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Immunomedics has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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