ImmunoCellular receives 'buy' rating from Summer Street Research

ImmunoCellular Therapies (OTC:IMUC) has received a 'buy' rating from Summer Street Research Partners, based largely on its ICT-107 vaccine product, used to treat patients with newly diagnosed glioblastoma multiforme (GBM), a common and aggressive form of malignant brain tumor.
The research firm said it is initiating a 'buy' rating and a full year 2011 target price of $8.00. Recently, ImmunoCellular has been trading around the $2.00-per-share mark.
ImmunoCellular has used its passive immunotherapy proprietary discovery technology to identify and develop monoclonal antibodies, specifically for the treatment of two types of cancer, although Summer Street said it could be used to discover and diagnose a wider range of diseases.
The company's lead product, ICT-107, which was praised in June on CBS New York's Channel 2 Newscast, titled "Vaccine Could Kill Brain Tumours Using Body's Own Immune System", is in its pivotal phase II trials for patients with newly diagnosed GBM.
It is a personalized vaccine, derived directly from the patient's tumor, and uses a combination of six antigens. The antigens stimulate the patient's cells to attack cancerous ones, halting tumor growth.
The phase I trial enrolled 16 newly diagnosed patients. The study found that ICT-107, in addition to traditional forms of treatment like surgery, radiation and chemotherapy, achieved the end point of 100% overall survival rate at one year, and 80% at two years.
The upcoming phase II trial, which ImmunoCellular says will begin mid-2012, plans to enroll 200 newly diagnosed patients. The primary end point is also overall survival.
Each year, approximately 10,000 people are newly diagnosed with GBM. About 80% of them undergo surgery, and 70% of them have the human leukocyte antigen (HLA) required for the ICT-107 vaccine to work.
According to Summer Street, this leaves approximately 6,000 patients open for treatment with ICT-107 each year.
The research firm said it expects ImmunoCellular to sell its vaccine for approximately $250,000 for the full treatment unit.
Summer Street forecasted U.S. sales of ICT-107 in 2016 at $34 million, expecting sales to rise to $576 million in 2021.
"[ImmunoCellular] is significantly undervalued when compared to other late-stage companies," said researcher Carol Werther. "Although some of the disparity may be due to the pivotal result read-out four years away, given the recent approval of two immune-based cancer treatments we would expect significant appreciation as the pivotal trial approaches the interim analysis in late 2012."
Summer Street also cited ImmunoCellular's ICT-121 vaccine. Originally intended for the treatment of recurrent GBM, the product may be able to treat for other cancers also.
Still, the researchers believe that the Los Angeles, California-based company will need to raise additional capital prior to profitability in 2017.
Summer Street did however warned that manufacturing biologics on a commercial scale is complex and costly, and competition is strong, while the reimbursement for high-priced therapies can be difficult.
But, in addition to ICT-107 and ICT-121, the company offers other technologies influencing the 'buy' rating.
The ICT-109 is a diagnostic in pre-clinical trials that can differentiate between cancerous and non-cancerous samples in small lung cancer and pancreatic cancer. ImmunoCellular is currently searching for partners and licenses to combine this technology with other cancer-killing technologies to continue its development.
ImmunoCellular's ICT-69 technology is in pre-clinical studies and targets ovarian cancer and multiple myeloma, a type of cancer that affects the body's bone marrow.