Immutep shares drop sharply after trial results but analysts still bullish on the stock

Investors have misread the latest Immutep trial results, smashing the stock price and creating an ‘obvious buying opportunity’, analysts say.

Immutep released cancer drug trial results on Thursday.

Investors have misread the latest Immutep trial results, smashing the stock price and creating an “obvious buying opportunity” analysts say.

The life sciences company on Thursday released the results of a Phase IIB trial of its compound Efti in combination with Merck’s Keytruda, as a first line head and neck cancer treatment.

Immutep shares were smashed in early trade, falling as low as 23c against the previous close of 43.5c, before recovering to be 20.7 per cent lower at 34.5c by noon.

Analysts at Wilsons Advisory, which as a $1.13 price target on the stock, said “The market has yet again misread Immutep and (this) should represent an obvious buying opportunity’’.

The trial results showed strong performance for the drug combination in two cohorts of patients in the trials, including those with no T-cell, or immune response, in their tumours.

“Immutep’s MHC Class II agonist in combination with Keytruda led to higher overall response rates in evaluable patients according to ... the primary endpoint of the study – across all levels of PD-L1 (protein) expression as compared to Keytruda monotherapy,’’ the company told the ASX.

Immutep’s chief science officer Dr Frederic Triebl said the company was “pleased with the quality of responses’’.

“Once again, durability is tracking well driven by the complementary nature of these two unique immunotherapies in fighting cancer.

“Efti’s distinct activation of dendritic cells as an MHC Class II agonist and the resulting

engagement of multiple facets of the adaptive & innate immune system has consistently translated into promising duration of responses in combination with immune checkpoint inhibitors across multiple oncology indications.’’

The Wilsons analysts, in response to the precipitous share price drop, felt the need to underline parts of their note to clients on Thursday, saying, “We should make this very clear: from the results released today Efti in combination with Keytruda demonstrated superior objective response rates compared to Keytruda alone, regardless of level of PD-L1 expression’’.

“We had low expectations that the trial would show statistical significance, given it was not powered to do so.

“The market is also completely ignoring that Immutep have announced that data from Part B has substantially improved from early data release in April which already demonstrated more than five times vs. Keytruda monotherapy in this cohort.’’

Wilsons said the results were in line with expectations and maintained its overweight recommendation and $1.13 price target.

Bell Potter analysts said it was “a pleasing set of data and certainly supportive of further investment in clinical trials’’.

“The data in all patient cohorts will continue to mature in the months ahead, leading to the crucial readouts on progression free survival and overall survival at some point likely in 2025,’’ they said in a note to clients.

“We maintain our Buy (speculative) rating on IMM and valuation of 80c.’’

About 33 million Immutep shares had been traded by noon on Thursday, up from the average of 2.6 million.

Originally published as Immutep shares drop sharply after trial results but analysts still bullish on the stock