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Investors Not Impressed with Immunomedics’ IMMU-132 Study

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Market outlook

On June 6, 2016, the Markets turned positive as Janet Yellen, chair of the Federal Reserve, hinted at a rate hike, although she didn’t mention the timing of a hike.

Wall Street saw this as a dovish view. The Dow Jones Industrial Average and the SPDR S&P 500 ETF (SPY) rose 0.6% and 0.5%, respectively. However, biotech stocks continued their upward trend and appeared to be in a positive, consolidating mood. The iShares Nasdaq Biotechnology ETF (IBB) rose 1.5% that day.

IBB closed at $286.07 and was trading above its 20-day moving average. It has fallen 15.5% on a year-to-date basis. In IBB’s portfolio, 147 stocks rose and 42 stocks fell from the previous day’s close.

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Outperformers and underperformers

On June 6, 2016, the top gainers in IBB were Sequenom (SQNM) and Acadia Pharmaceuticals (ACAD), which rose 13.4% and 12.8%, respectively. Sequenom moved on higher trading volumes, with ~1.4 million shares traded compared to a three-month average trading volume of 665,000 shares per day. Flex Pharma (FLKS) and Immunomedics (IMMU) are the most underperforming stocks. They fell 3.4% and 13.7%, respectively. Flex Pharma fell on profit booking.

Immunomedics stock falls 13.7%

Immunomedics was the most underperforming stock in IBB on June 6, 2016. The stock fell since investors weren’t impressed by data from the company’s sacituzumab govitecan (IMMU-132) trial, which had a response rate of 13%.

In a press release, Immunomedics announced that “sacituzumab govitecan (IMMU-132), its lead investigational antibody-drug conjugate ([or] ADC), shrank tumors by 30% or more initially in 26% (12/46) of evaluable patients with metastatic non-small-cell lung cancer ([or] NSCLC), with a later confirmed overall objective response rate ([or] ORR) of 13%, in accordance with RECIST 1.1 criteria. For the patients with confirmed responses, the duration of response ([or] DOR) was 9 months.”

Immunomedics closed at $3.90 and was trading below its 20-day moving average price of $4.20. However, the stock has risen 27% on a year-to-date basis. It recorded trading volumes of 8.4 million shares compared to the three-month average trading volume of 1.6 million shares per day. Immunomedics has a book value of $-0.47 and a weight of 0.1% in IBB’s portfolio.

In the next part of our series, we’ll see why Mylan is so high after the trastuzumab biosimilar data.

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