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Why Is Immunomedics (IMMU) Down 13.1% Since Last Earnings Report?

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A month has gone by since the last earnings report for Immunomedics (IMMU - Free Report) . Shares have lost about 13.1% 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 drivers.

Immunomedics Posts Wider-Than-Expected Loss in Q2

Immunomedics incurred a loss of 40 cents per share in the second quarter of 2019, narrower than the loss of 68 cents in the year-ago quarter. However, the loss was also wider than the Zacks Consensus Estimate of a loss of 32 cents.

The company did not generate any revenue in the second quarter of 2019, mainly due to the discontinued sale of LeukoScan in February 2018 to focus on its antibody-drug conjugate (“ADC”) business.

Total costs and expenses were $67.2 million in the second quarter compared with $52.8 million in the year-ago quarter, mainly due to a $29.3-million increase in research & development and sales & marketing expenses, partially offset by decreases in general & administrative expenses. 

The company’s most advanced product candidate is sacituzumab govitecan, which is currently being evaluated in a phase III ASCENT study in patients with mTNBC, who have received at least two prior therapies. The company reached its target enrollment for the phase III confirmatory ASCENT study (NCT02574455) in mTNBC patients, previously treated with at least two systemic chemotherapy regimens. Top-line data are expected in mid-2020. 

The company expects to resubmit its biologics license application (BLA) for sacituzumab govitecan in mTNBC in the fourth quarter of 2019.

The company initiated TROPICS-03 (NCT03964727), a multi-cohort phase II study designed to assess the clinical activity of sacituzumab govitecan in patients with metastatic solid tumors, including NSCLC, small cell lung cancer, head and neck cancer, and endometrial cancer. Dosing of the first NSCLC patient is expected in the third quarter of 2019.

The open-label phase Ib/II SEASTAR study (NCT03992131) of sacituzumab govitecan in combination with Clovis Oncology’s (CLVS) PARP inhibitor, Rubraca (rucaparib), for the treatment of mTNBC, mUC and platinum-resistant ovarian cancer is enrolling patients with at least one prior line of standard therapy for advanced disease.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 7.74% due to these changes.

VGM Scores

At this time, Immunomedics has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile 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

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Immunomedics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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