Why Is Immunomedics (IMMU) Down 18% Since Last Earnings Report?

It has been about a month since the last earnings report for Immunomedics (IMMU). Shares have lost about 18% 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 Reports Wider-Than-Expected Q4 Loss

Immunomedics incurred a loss of 50 cents per share in fourth-quarter 2019, wider than the Zacks Consensus Estimate of a loss of 45 cents but in line with the loss incurred in the year-ago quarter.

Total revenues were $0.3 million in the quarter, including service fee revenues earned related to the Janssen Promotion agreement.

Total costs and expenses were $91.5 million in the fourth quarter compared with $87.4 million a year ago, mainly due to increase in research & development expenses — mostly attributable to activities related to preparations for the approval and commercial launch of sacituzumab govitecan for patients with at least two prior lines of treatment for metastatic triple-negative breast cancer(mTNBC) in the United States — as well as CRL remediation costs.

Pipeline Update

The company resubmitted biologics license application (BLA) seeking accelerated approval for sacituzumab govitecan in mTNBC, which was accepted for filing by the FDA with an action date of Jun 2, 2020.

During the quarter, it initiated the phase III registrational TROPiCS-02 study of sacituzumab govitecan in hormone receptor-positive/human epidermal growth factor receptor 2-negative (HER2) metastatic breast cancer.

The company continues to expand clinical collaborations to move sacituzumab govitecan into earlier lines of therapy in breast cancer, including the combination with Roche Holding (SIX:ROG) AG’s Tecentriq in frontline mTNBC and the German Breast Group’s phase III study in the curative setting of HER2 breast cancer as a single-agent.

The company also initiated the multi-cohort, Trop-2-enriched phase II TROPiCS-03 study of sacituzumab govitecan for patients with metastatic non-small cell lung cancer.

Milestones for 2020

Immunomedics expects to report top-line data from the phase III confirmatory ASCENT study at around mid-2020.

It also expects to report top-line data from full cohort of 100 patients with prior platinum-based and immune checkpoint inhibitor therapies from the phase II pivotal TROPHY U-01 study.

The company expects to complete enrollment for the 40-patient cohort of cisplatin-ineligible patients in TROPHY U-01.

How Have Estimates Been Moving Since Then?

Estimates review followed a flat path over the past two months. The consensus estimate has shifted -6.37% due to these changes.

VGM Scores

At this time, Immunomedics has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Immunomedics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.