Immunomedics Could Face Second FDA Rejection For Breast Cancer Drug, Goldman Sachs Says In Double Downgrade

Immunomedics, Inc. IMMU is knocking the FDA door a second time for its lead drug sacituzumab govitecan in triple-negative breast cancer. 

Following the issue of Form 483 by FDA representatives, an analyst at Goldman Sachs said he thinks the drug will stumble yet again in the approval process. 

The Immunomedics Analyst

Paul Choi double downgraded shares of Immunomedics from Buy to Sell and lowered the price target from $24 to $5, suggesting roughly 53% downside. 

The Immunomedics Thesis

The Form 483 detailed 10 broad observations of the New Jersey facility, and a majority of the concerns relate to quality control issues, inadequate procedures and their implementation, and substandard equipment/facility maintenance, Choi said in a Friday note. (See his track record here.)

The analyst said it's unlikely that SG will be approved by the June 2 PDUFA date.

A Form 483 issued in August 2018 culminated in the FDA issuing a complete response in January 2019, citing manufacturing issues, he said. 

"Given that three months remain between the most recent Form 483 and the upcoming PDUFA, it is unclear to us whether IMMU will be able to address these concerns adequately." 

Choi also said Goldman is cautious on the company's ability to execute on other ongoing clinical studies without the revenue generated in TNBC.

The analyst named the following as impending stock catalysts:

• June 2020 PDUFA date for SG in TNBC.
• Updated data from TROPHY-U01 study, scheduled for 2020.
• Phase 3 ASCENT data in TNBC in the second half of 2020.

IMMU Price Action

At last check, Immunomedics shares were slumping 10.52% to $9.53.

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