Let Volatility Power Your Micro-Cap Biotechs RNN, IMNP, TG, ADRO
ROTH Capital Partners’ Joseph Pantginis falls into that old-fashioned category of analysts who believe that good data can’t help but drive a stock, no matter how far into the depths it may have sunk. In this interview with The Life Sciences Report, Pantginis presents his detailed growth theory on two names, and he leaves two Focus Picks on the table for investors to do further diligence on.
Joseph Pantginis:: Immune Pharmaceuticals Inc. (IMNP:NASDAQ) is in the same category from the micro-cap standpoint, since clinical data are going to drive this company.
Immune Pharmaceuticals has several products in its pipeline, but the lead driver, in my belief, is bertilimumab, a fully human antibody that targets a protein called eotaxin-1, which plays an important role in inflammation. Looking at the history of this target—and what’s so interesting here—is that just a few years ago eotaxin-1 was considered to be a biomarker of inflammation, or levels of inflammation. It turns out to be a therapeutic target as well, and the more severe the inflammation, depending on the disease indication, the more eotaxin-1 is present. This is positive for bertilimumab because it basically gives more target for the drug.
“There has been a bit of avoidance in getting the generalists back into this market due to the continuing volatility.”
The company is looking at three different indications right now, one of which I think will also have the potential for significantly increased visibility: atopic dermatitis. The presence of eotaxin-1 is part of that disorder. The increasing visibility on atopic dermatitis is because of the recent success of Regeneron Pharmaceuticals Inc. (REGN:NASDAQ) antibody dupilumab. I also cover Regeneron, and we have it rated a Buy. Dupilumab has breakthrough drug designation from the FDA, and it just demonstrated very nice, positive Phase 3 data. Regeneron will be filing for approval in Q3/16. The increase in visibility from Regeneron and dupilumab on atopic dermatitis could have a positive translational effect on Immune Pharmaceuticals’ bertilimumab.
Immune Pharmaceuticals’ other lead indications, also inflammatory diseases, are an orphan skin disorder called bullous pemphigoid, and a much larger indication in ulcerative colitis. Both of these studies are ongoing. We could see data by the end of 2016, and that’s what it will take to attract investors—beginning with the healthcare-focused investors. In this sense, waiting for data, Immune Pharmaceuticals fits into the same category as Rexahn. But again, we do have strong preclinical model data.
The Life Sciences Report:: Immune Pharmaceuticals also has an immuno-oncology drug, Ceplene (histamine dihydrochloride), approved in the European Union and in Israel. It has the active Phase 2 program in inflammatory disease that you just described. It also has analyst coverage from good investment banks. Can you tell me why this company has a ~$15M market cap?
Joseph Pantginis: That’s a good question. There is not a lot of U.S. visibility on Immune Pharmaceuticals, and that’s because this is a foreign-based company. It’s an Israeli biotech. Only over the last six months to a year has it brought its operations solidly to the U.S., here in New York City. Again, as we’ve discussed, many investors have gone away from biotech over the past year and have not yet returned—and on top of that, it is hard for a predominantly foreign-based micro-cap biotech company to get U.S. investor exposure. Unfortunately, these issues have impacted the stock. Data should be the driver.