Why Immunovant Could Benefit From The J&J-Momenta Deal

Immunovant Inc IMVT shares were ripping higher Wednesday in a sympathy move.

What Happened: Shares of New York-based Immunovant, which focuses on treatment for autoimmune disorders, gap-opened Wednesday's session higher and were seen trading with notable gains.

This is despite a lack of any company-specific announcement.

The gains can be traced to a deal announced by Johnson & Johnson JNJ to buy another autoimmune diseases-focused biopharma, Momenta Pharmaceuticals, Inc. MNTA.

Momenta's lead drug nipocalimab is anti-FcRn antibody that is currently being developed in clinical programs for multiple autoimmune disorder indications.

Analyst Sees Positive Read-Through For Immunovant: The J&J-Momenta deal validates the anti-FcRn space, SVB Leerink analyst Thomas Smith said in a Wednesday note. 

The deal represents the first significant M&A investment in the class from a large pharma or biotech beyond Alexion Pharmaceuticals, Inc. ALXN, which had previously completed smaller licensing transactions for ALXN1830 and ABY-039, the analyst said. 

Immunovant's investigational product candidate IMVT-1401 is also an anti-FcRn antibody.

The validation of the substantial FcRn opportunity is likely to drive Immunovant shares higher, Smith said. 

SVB Leerink continues to see Immunovant as well-positioned to capitalize on increasing strategic interest in the class, given IMVT-1401's favorable attributes, which include competitive IgG lowering, a relatively clean safety/tolerability profile vs. the rest of the FcRn class and a subcutaneous injection formulation, the analyst said. 

SVB Leerink reiterated an Outperform rating on Immunovant with a $26 price target. 

IMVT Price Action: Immunovant shares were rallying 11.67% to $30.72 at the time of publication Wednesday. 

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