Newsletter Watch: Immtech Pharmaceuticals, Inc.
This week’s newsletter watch focuses on Immtech Pharmaceuticals, Inc. (AMEX: IMM), a biotech small cap with coverage recently initiated by industry expert John McCamant.
McCamant is a long-standing authority in the biotech field, beginning as an equities analyst for the American Healthcare Fund. He then focused on the venture capital side of the sector at Burrill & Company, a San Francisco-based private merchant bank, before founding Ten Peaks Capital, a financing company in the life sciences industry.
In the 1990s, he took over as editor of The Medical Technology Stock Letter, a leading newsletter focused on the biotech space that had been founded by his father, Jim McCamant, also a well-known authority on biotechnology stocks. Today, Jim remains one of the newsletter world's most respected advisors in the biotech space.
Regarding Immtech, he explains, "The company has multiple promising mid- and late-stage programs devoted to significantly underserved and potentially lucrative indications, such as African sleeping sickness and Pneumocystis pneumonia."
IMM, he points out, is focused on the development of therapeutics for some of the world's most devastating acute infectious diseases—diseases for which new and improved treatments are severely needed and in which market sizes are often measured in billions.
The diseases IMM is focused on treating using its lead drug candidate, pafuramidine (DB289), include malaria, trypanosomiasis (commonly referred to as African sleeping sickness) and Pneumocystis pneumonia (PCP). PCP is a fungal infection of the lungs that can lead to potentially deadly pneumonia in patients with HIV and other immuno-compromised patients.
Additionally, he says, IMM has an already robust and still-growing library of compounds that target Hepatitis C, fungal infections and bacterial infections.
"Importantly, IMM's intellectual property position surrounding their technology and compounds also appears to be rock solid--they possess the exclusive license to over 140 issued patents, and an additional 240 filed patents around the world,” McCamant says.
The advisor says that because the company's initial focus is on acute infectious diseases, the treatment regimens involved in these settings are short, with clearly definable endpoints that can be measured in terms of weeks rather than years.
"This not only enables a potential quicker route to commercialization, but because fewer patients are required in these trials, they are relatively less expensive to run than traditional drug trials," he says.
Plus, McCamant says that through several existing relationships with foundations and academia, IMM has funded a significant portion of its R&D without using shareholder dollars, which has allowed the company to essentially avoid going to the equity markets, and in turn, keep their share count down.
According to McCamant, Immtech recently announced that the State Food and Drug Administration of the People's Republic of China (or the SFDA, which is the equivalent of the FDA in this country) has granted pafuramidine Fast Track Status for conducting a Phase 3 trial for the treatment of Pneumocystis pneumonia.
"As such, IMM's drug candidate is one of the first to be considered for Fast Track Status under the newer and stricter SFDA guidelines that have been established in that country. This did not occur by accident, as the company has strong ties to China," he says.
With the initiation of this Phase 3 trial, McCamant says, pafuramidine will be the first drug candidate to advance into the clinic in China for the treatment of HIV-related PCP.
"PCP is one of the most common opportunistic infections that arise in the 40+ million HIV patients worldwide. Not only that, but there are only a couple of treatment alternatives for the indication, and patient intolerance and resistance to these medications is on the rise,” he says. "Thus, there is a significant opportunity here for IMM, and the receipt of the Fast Track Status from the SFDA will help to potentially expedite this opportunity.”
McCamant says IMM’s business model is impressive, because it leverages the private funding into a public company.
“This is a positive reflection of the company's management team, which has significant Wall Street experience on the buy-side, and knows and appreciates how important it is to deliver value to their investors in a timely fashion,” he says. "Over the next several months, we expect to see multiple potential catalysts take place that could help the company's stock move higher, and we want to own IMM ahead of time. IMM is a buy under $9 with an 18 to 24 month target of $18."
On Thursday, the stock closed at $7.21. Over the last 52 weeks, IMM shares have been trading between $5 and $9.60.
