Immutep (ASX: IMM) (NASDAQ: IMMP) stock is up 65% in the US, 31% in Australia, on news about the success of the company's lung cancer treatment. Success, here, is obviously a relative term as this isn't, still not by a long shot, proof that the drug entirely works and will be approved for sale. But it is another step along that long road of getting there.
There are actually two announcements: “Immutep's Efti in Combination with Pembrolizumab Achieves Excellent Initial Overall Survival Benefit in 1st Line Non-Small Cell Lung Cancer” That mouthful means that there's encouraging evidence in Phase II trials that the drug actually works. Phase I basically tries to find out whether the drug poisons people. Phase II, well, does it work? Phase III then checks for wider effects on those who take it - side effects and so on. Only at the end of that whole process might a drug actually be approved for sale. A reasonable guess at the total timespan is a decade. The second announcement: “Immutep Receives Positive Feedback from FDA on Late-Stage Clinical Development of Eftilagimod Alpha in Non-Small Cell Lung Cancer”. Everything, but everything, depends upon the FDA here. They are the people who approve a drug or not, they are the people who define the testing system which leads to that decision. So, if they‘re making approving noises then that's good. It doesn't guarantee approval, of course it doesn't, but it's a lot better than their being down on the idea.
Immutep share price from ASX
Immutep share price from NASDAQ
As we can see the Immutep share prices are slightly out of step. That's because the NASDAQ quote is 10 pieces of the Australian stock - also we've the AUD/USD exchange rate to think about. Finally, of course the two markets are 10 to 12 hours out of whack with each other.
As we say this recent news doesn't guarantee anything about approval. But that whole process is a series of hurdles that must be leapt. Fail at any one of them and the entire idea then dies - it's necessary to keep passing each one in order to achieve that ultimate goal of being approved and being able to sell the drug or treatment. What this then means is that hurdling each objective is a valuation moment. Passing each test derisks, once again, the company. So, clearly value rises once each stage is passed.
This is also usually the point at which a company announces a capital raise. This might not happen here as Immutep has a cash runway extending out to end 2024 at current spending rates. They might well wait for more valuation events and a higher share price before they raise more capital.