Senior Equity Analyst
Equity Research Immunovia: Making headway with new cancer screening test
26 Feb 2025
Read the initiation of coverage here:
Immunovia is developing a test for pancreatic cancer. Most cases of pancreatic cancer are diagnosed when they are unresectable, highlighting the need for better diagnostics. We estimate a TAM of USD 1.1bn with LDT sales starting in H2 2025.
New laboratory-developed test with strong results in tough indication
Pancreatic cancer is one of the deadliest forms of cancer, with SEER estimating that the incidence and mortality in the USA for 2024 was at 66,440 cases and 51,750 deaths. A key part of the problem is the asymptomatic nature of the disease, meaning that most patients only get diagnosed at stage III or IV, often when the cancer is unresectable. With a clear need for diagnostics, Immunovia is developing a next-generation test for pancreatic cancer. In a clinical validation study that looked at early-stage pancreatic ductal adenocarcinoma (PDAC), the test achieved a sensitivity of 78% and a specificity of 94%. The test was 14 percentage points more sensitive than CA19-9, an FDA-approved biomarker for monitoring PDAC.
Focus on high-risk patients with clear unmet clinical need
Immunovia is targeting a subset of pancreatic cancer patients, specifically, high-risk patients with a family history of pancreatic cancer or a genetic predisposition for it. This is a sound strategy as selling screening of the broader population is not feasible. However, in the HRI/familial population, the risk of PDAC warrants annual monitoring. The problem is that, currently, invasive tests like endoscopic ultrasounds are being performed, inhibiting patient compliance. On the other hand, the test being developed by Immunovia is based on the ELISA assay and uses relatively simple bloodwork. Thus, the invasiveness and time requirement for the patient would go down, potentially improving compliance and increasing the number of patients who catch the disease early.
Share price potential with many inflection points in the short term
Immunovia headed into 2025 with a positive outcome in the CLARITI study and three goals for 2025. The company will conduct a targeted launch of the test in the USA during the second half of the year. The company will find a partner for faster and wider commercialization. Finally, the company will finalize further clinical studies to secure proper reimbursement for the test. Thus, the company has many exciting inflection points coming up during the year. Furthermore, the company has recently announced the outcome of an exercise of warrants, raising a total of SEK 42 million before issuing costs. Immunovia can raise an additional SEK 47 million before issuing costs through their warrants of series TO3 that expires in April.
We assume modest sales beginning in 2025 with a significant ramp-up in 2027. Our asssumption of total addressable market for Immunovia covers HRI patients in the USA and Europe with new-onset diabetes (NOD) patients representing a significant expansion opportunity. Through a DCF and multiple valuation, we reach a target price of SEK 0.65 in the base case, increasing to SEK 1.53 in the bull case and decreasing to 0.25 in the bear case.
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