Immunomedics Analyst Says Trodelvy Likely To Capture 50% Market Share

Immunomedics, Inc. IMMU stock, which has been on a broader upward trajectory since FDA approved its lead asset Trodelvy, has further room to run, according to a Jefferies analyst. 

The Immunomedics Analyst: Chris Howerton reiterated a Buy rating on Immunomedics and increased the price target from $41 to $55.

The Immunomedics Thesis: After a long wait, Immunomedics now has a commercial product in Trodelvy, which received the FDA nod for treating metastatic, triple-negative breast cancer in late April, Howerton said in a Monday note. (See his track record here.)

Following a volatile period for the stock over the last year, investors are now focused on the strength of Trodelvy's launch; potential label expansion in earlier lines of therapy and other indications; any further pipeline opportunities; and speculation on M&A, the analyst said.

Trodelvy is in the middle of a strong launch, Howerton said, citing a Jefferies survey of 50 U.S.-based medical oncologists regarding Trodelvy awareness and prescribing habits, as well as an attempt to predict trends over the next 12 months. The analyst said he expects the trend to continue.

Jefferies' revised price target factors in a faster ramp in penetration rates during the early stages of the launch, an increase in both prescription compliance rates and year-over-year price increase. 

The awareness level among the oncologist community is high, and utilization appears to be over 90% after about three months on the market, Howerton said. 

Physicians showed a willingness to prescribe Trodelvy in earlier lines despite its label for third-line+ setting, the analyst said.

Access and reimbursement appears to be seamless in the early stages of launch, he said.

"While utilization and penetration rates are already relatively high, our regression analysis suggests this momentum to grow, achieving ~40-50% market share in 3L mTNBC patients over this first year."

IMMU Price Action: Immunomedics shares were trading 4.2% higher at $42.94 at last check Monday. 

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