Paradigm starts Immunovaccine at buy

Paradigm Capital has initiated coverage of Immunovaccine (TSX-V:IMV) with a “buy” and 12-month price target of $2.50.  The stock closed at $1.30 on Friday.

Analyst Claude Camire writes that his target price is based on the sum of the risk-adjusted asset value for the company’s veterinary vaccines of about 75 cents a share and its DPX-0907 cancer vaccine of about $1.75.  “While Immunovaccine’s DepoVax vaccine delivery platform has broad applicability, on a longer term perspective, DPX-0907, targeting multiple cancers is clearly the value driver in our revenue model and valuation analysis.”

This month, the company plans to initiate the first Phase 1 clinical trial of DPX-0907 in breast, ovarian and prostate cancer patients at five sites in the U.S., with interim results due in the fourth quarter of fiscal 2010.  It also has preclinical vaccine programs underway in influenza, Hepatitis B and pseudomonas aeruginosa, a bacterial infection that can lead to death.

In its veterinary business, Pfizer Animal Health (NYSE:PFE) is developing three vaccines that use Immunovaccine’s vaccine formulation technology for undisclosed applications. “With positive field testing, we expect these products to be market ready in the next 24 months,” Mr. Camire said.