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Immunovant (IMVT) Reports Narrower-Than-Expected Loss in Q4

·4 min read

Immunovant, Inc. IMVT reported a net loss of 29 cents per share in the fourth quarter of fiscal 2021, narrower than the Zacks Consensus Estimate of a loss of 33 cents and the year-ago loss of 38 cents.

Currently, the company does not have any approved product in its portfolio. As a result, it is yet to generate revenues.

Shares of Immunovant were down 38% following the announcement of the earnings results on Monday. In fact, the stock has plunged 79.6% so far this year compared with the industry’s decrease of 4%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Quarter in Detail

In the reported quarter, research and development (R&D) expenses were $18.6 million, up 30.9% from the year-ago quarter. The year-over-year increase was attributable to increase in contract manufacturing costs, driven by the expansion of the company’s clinical study programs for the treatment of autoimmune diseases.

General and administrative (G&A) expenses were $10.3 million in the reported quarter, up 63.4% on a year-over-year basis. The increase was primarily due to higher personnel costs and stock-based compensation expenses resulting from higher headcount.

As of Mar 31, 2021, the company had cash balance of approximately $400 million compared with $422 million as at Dec 31, 2020.

Pipeline Update

Immunovant is developing its lead pipeline candidate – IMVT-1401 – with an initial focus on the treatment of myasthenia gravis (“MG”), thyroid eye disease (“TED”) and warm autoimmune hemolyticanemia (“WAIHA”).

In February 2021, the company voluntarily paused dosing in ASCEND GO-2 – a phase IIb study in TED, and in ASCEND-WAIHA – a phase II study on IMVT-1401 in WAIHA, due to elevated total cholesterol and LDL levels observed in patients who were treated with IMVT-1401.

We note that, in August 2020, the company reported results from phase IIa ASCEND MG study, wherein IMVT-1401 was observed to be well-tolerated with no serious adverse event reported, no withdrawal due to adverse events, and no imbalance in headaches.

Along with earnings release, Immunovant announced that on receipt of approval from regulatory agencies, the company plans to initiate a pivotal study on IMVT-1401 for treating MG as well as resume the phase II study on IMVT-1401 in WAIHA in late 2021 or early 2022.

We note that Alexion Pharmaceuticals ALXN is developing ALXN1830 in WAIHA. A phase II study on the same is expected to begin in the second half of 2021. Johnson & Johnson’s JNJ is developing nipocalimab in WAIHA.

The company also plans to initiate at least two additional clinical studies over the next 12 months, including another pivotal study next year.

Meanwhile, as part of Immunovant’s data review, the phase IIb TED study was unblinded and has been terminated prior to completion. The company plans to work with regulators and believes that a phase II study rather than a pivotal study is likely to be the next step for developing IMVT-1401 in TED.

Immunovant, Inc. Price, Consensus and EPS Surprise

Immunovant, Inc. Price, Consensus and EPS Surprise
Immunovant, Inc. Price, Consensus and EPS Surprise

Immunovant, Inc. price-consensus-eps-surprise-chart | Immunovant, Inc. Quote

Zacks Rank & Key Pick

Immunovant currently carries a Zacks Rank #4 (Sell).

A top-ranked stock in the biotech sector is Repligen Corporation RGEN which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Repligen’s earnings estimates have been revised 15.7% upward for 2021 and 13.4% upward for 2022 over the past 60 days.

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