Tuesday, B.Riley initiated coverage on Immunic Inc. (NASDAQ:IMUX) with a Buy rating and a price target of $6.00. The firm sees Immunic's lead drug candidate, vidofludimus calcium (vido), for treating relapsing and progressive multiple sclerosis, as undervalued at the current market valuation of approximately $50 million.
The new coverage highlights the potential of vido, which is seen as too similar to the existing drug teriflunomide by investors, according to B.Riley.
The firm believes that vido's mechanism, which includes dihydroorotate dehydrogenase (DHODH) inhibition along with Nurr1 activation, offers additional benefits. Nurr1 activation is noted for its neuroprotective and anti-inflammatory effects on neurons, microglia, and astrocytes, which are critical in the progression of multiple sclerosis.
B.Riley's assessment suggests that the market has not fully recognized the therapeutic advantages of vido over teriflunomide and other drug classes like anti-CD20/BTKi. The firm's position indicates a confidence in the drug's unique approach, combining established DHODH inhibition with a novel mechanism to enhance its efficacy in treating multiple sclerosis.
The analyst from B.Riley commented on the potential of vido, emphasizing its capacity to build upon the established DHODH inhibition strategy by adding Nurr1 activation. This dual-action is expected to provide significant neuroprotective and anti-inflammatory effects, which are essential in managing the progression of multiple sclerosis.
Immunic's stock is expected to respond to the new coverage and price target set by B.Riley, as the market digests the firm's positive outlook on the company's lead candidate for multiple sclerosis treatment.
In other recent news, Immunic Inc. has been making significant strides in its operations and leadership. The company reported a Q1 2024 loss of $29.6 million, contrasting with the previous year's first quarter net loss of $2.3 million. Despite this, Immunic successfully raised $240 million through a private placement, which is expected to fund operations through Q3 2025.
The company has seen changes in its executive team, with the appointment of Simona Skerjanec to its board of directors, bringing a wealth of pharmaceutical industry experience. Jason Tardio has also joined Immunic as its new Chief Operating Officer and President, and Werner Gladdines has been promoted to Chief Development Officer.
The firm's lead drug candidate, vidofludimus calcium, is currently in phase 3 and phase 2 clinical trials for relapsing and progressive multiple sclerosis. Immunic also revealed positive interim data from the Phase 2 CALLIPER trial of vidofludimus calcium and received a Notice of Allowance for a patent covering this compound.
In their annual meeting, Immunic shareholders elected Dr. Daniel Vitt and Dr. Duane Nash as Class I directors to serve on the company's board until the 2027 annual meeting. The appointment of Baker Tilly US, LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024, was also ratified.
InvestingPro Insights
The recent coverage by B.Riley on Immunic Inc. (NASDAQ:IMUX) is complemented by several key data points and insights from InvestingPro. Notably, Immunic holds more cash than debt on its balance sheet, which is a positive sign for investors looking for financial stability in a company. However, it's worth mentioning that the company is quickly burning through cash, which raises questions about its long-term sustainability without additional funding or revenue streams.
From a market perspective, Immunic's stock has experienced significant volatility, with a sharp decline over the last week, but it has also shown a strong return over the last three months. This could indicate short-term trading opportunities, although the lack of profitability over the last twelve months and analysts' expectations that the company will not be profitable this year suggest caution for long-term investors.
InvestingPro data reveals that Immunic has a market capitalization of around $130.61 million, with a negative P/E ratio reflecting its current lack of earnings. Importantly, the company does not pay a dividend, which is typical for firms focused on growth and reinvestment. For those interested in delving deeper into the financial health and future prospects of Immunic, InvestingPro provides additional tips and a comprehensive analysis at https://www.investing.com/pro/IMUX.
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