Immutep (ASX: IMM) (NASDAQ: IMMP) shares are down 16% in Australia, likely driven by the fall in the US quote. The issue here is not that the company has done something wrong, nor that there's some disaster about to happen. Instead, we saw Immutep soar 65% some 10 days back. It's common enough that there is a reaction to such rises. This can be reconsideration of the prospect itself, can just be profit taking - after all, people who've just made 65% might think about banking some of that and that will mean at least some selling taking the price off that top. This is something to consider about any significant volatility in any share price. People will rethink, will either profit take, or possibly think they've spotted a bargain, so the buying and or selling flow will reverse at some point. Nothing goes on forever.
Immutep share price from ASX
We can see there the leap on the earlier announcement. Then a dip as perhaps there is that reconsideration, or possibly profit taking. Another bounce and so on. A more technical way to describe this is that once volatility has increased then volatility has increased. This is why options always cost vastly more on shares that have already had substantial price moves. Pretty much everyone in the market is aware that large price moves tend to be followed by large price moves. It's just that it's never known which direction the subsequent moves will be in - so that's volatility rather than a momentum trade.
As to what actually made Immutep bounce in the first place, as we said:
“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. “
Nothing has been approved, there is no product ready for sale. Immutep has been able to get through another of the barriers, that's all - more remain. So, the share price is really an option on being able to come to market at some future date. That's the other explanation for the volatility - options prices always are volatile.
