Stifel starts IGM Biosciences at buy; PT $32

Stifel launched coverage of IGM Biosciences (NASDAQ:IGMS) with a “buy” rating and $32 price target. The stock closed at $17.25 on Oct. 11.

“We believe the company’s first/only-in-class, IgM-based antibody platform represents a potentially significant paradigm shift from the industry-wide convergence on IgG-based antibodies, which, despite their commercial success, have proven to be suboptimal tools for specific therapeutic applications,” writes analyst Stephen Willey.

“We expect IGM-2323 (the centerpiece of our estimates/valuation) to emerge from an admittedly crowded development landscape of CD20-targeting, IgG-based competitors struggling to navigate narrow therapeutic windows as a best-in-class option for T-cell engagement in B-cell malignancy patients,” he added.

Mr. Willey said the DR5 agonist program, with an IND filing estimated in 2020, leverages well-validated biology and the receptor cross-linking capability of a multivalent IgM-based antibody to drive cancer cell apoptosis.

“We believe establishing clinical proof-of-concept with either/both of these lead programs will create a pipeline of additional opportunity, leveraging the same biological applications to different, well-established target antigens across various solid/liquid tumors,” he said.

In addition, he said management’s business development philosophy of maintaining/preserving this technological exclusivity “sets the stage for significant longer-term value creation.”

Sign up for the BioTuesdays weekly newsletter

Get the latest news on the healthcare industry’s corporate and clinical developments, executive moves, and market updates. Every Tuesday, in your inbox.