Why Did Immutep Ltd Stock Soar Recently?

Immutep Ltd NASDAQ: IMMP is a leading developer of immunotherapy treatments for cancer and autoimmune diseases. Specifically, they focus on Lymphocyte Activation Gene-3 (also known as "LAG-3"), a molecule located on the surface of cells that plays a crucial role in immune system regulation.

The final month of 2022 was perfect for Immutep Ltd, which helped drive the stock price up dramatically over the several weeks across the winter holiday season. Immutep is an extremely young company, so the rate by which they have managed to advance their leading product candidate is nothing short of astonishing.

Formerly known as Prima BioMed Ltd, the company changed its name to Immutep Limited in November 2017, even as it filed its IPO in April 2012. But while its stock does not have much history, its recent activity certainly has a much bigger story to tell.

Immutep Is Closing the Year Out Strong

In December alone, Immutep made a series of quick, strategic moves. For example, on December 6, 2022, Immutep announced the GMP Manufacturing process for developing IMP761 (one of their first-in-class LAG-3 agonists aimed at autoimmune diseases). A December 8 announcement followed that they achieved commercial manufacturing scale for their Eftilagimod Alpha, a large-molecule cancer drug. Finally, the company headed into the final week of the year, announcing a successful meeting with the FDA to use Eftilagimod Alpha in combination with Chemotherapy to treat Metastatic Breast Cancer.

While these events were progressive, the most recent meeting with the FDA helped drive the share price by 25% before the year's final week. The stock bump got a bit of a cushion on the heels of that news from the end of November, indicating that Merck KgaA OTCMKTS: MKGAY and Pfizer, Inc NYSE: PFE plan to team up with Immutep on a new urothelial cancer treatment.

Strong Product Candidates Keep Immutep Moving Forward

Currently, the company is developing three clinical (and one pre-clinical) LAG-3-related product candidates. These include two antibodies that modulate the immune response in cancer and autoimmune conditions. Their lead candidate is eftilagimod alpha (also classified as LAG-3lg or IMP321, from the TACTI-002 trial). This first-in-class antigen-presenting cell activator is currently in clinical trials as a combination therapy to treat various cancer indications.

The stock trades at 10 times its average daily trading volume (2.57 million shares vs. 202,956 shares). While the stock is currently just shy of the 52-week range median (at around $2.00), it still has a long way to go to make up the losses on the year. After all, the stock remains down nearly 40% on the year so far. However, the stock is up almost 17% over the last quarter.

The combination of positive recent growth and exceedingly high trading volume suggests much interest in Immutep. And looking at their most recent advances, it is easy to see why; after all, the Australia-based biotechnology firm has reported impressive advances for the second half of 2022.

This includes the TACTI-002 trial in June, a Japanese patent for the same drug candidate (IMP761/Eftilagimod Alpha) in July, and another Japanese patent for the drug combo, in August. By September, Immutep also secured funding in the form of a research tax credit from the French government, which helped them to secure FDA fast-track status for eftilagimod, in October.

Earnings are Improving, and Analysts Project Significant Growth

Moving forward, then, Immutep is going to be one worth watching. Their strides in December alone are a cue to keep an eye out for how those developments will turn out. More importantly, though, analysts have set a median price target for IMMP at $8.00, from $4.02 to $13.40. This price target represents an increase of at least +200% from the previous $2.00 (posted on December 23, 2022).

This somewhat dramatic margin comes at a turning point for Immutep stock in terms of earnings. Again, the stock is still very new to the index, so they do not have many historical data to inform any potential trends. That said, earnings for the company have been improving since 2019. IMMP's earnings have indeed failed to hit the consensus estimate every year for the past three years, but these losses have been shrinking. More importantly, revenues for 2022 came in at -$0.26, beating the consensus estimate—for the first time—by 11 cents.