Vator Securities: An unacceptable misunderstanding is circulating in the market

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Our jaws drop to the floor when we see the market selling Immunovia on the back of a press release that essentially confirmed the technical performance of IMMray PanCan-d, once again corroborating the robustness of the IMMray platform technology. As expected, the verification study demonstrated outstanding diagnostic accuracy in line with the previous commercial test model study.

The negative stock price reaction is both irrational and ill informed. Presumably it’s due to additional delay of sales start and an unacceptably inaccurate statement regarding the study design of the verification study circulating in the market.

We begin to explain the verification study. All studies have predefined inclusion criteria. Samples which do not fulfil the criteria are not advanced into the study, i.e. they are screened out. This is standard practice for all studies! These criteria may involve: patients to not undergo treatment, anaesthesia in connection with sampling etc. The specific inclusion criteria are applied to remove the influence of specific confounding variables not related to real life situation, and ensure adequate settings to evaluate the actual performance of the investigational product in the intended patient population.

In the verification study, there were samples that did not meet the inclusion criteria and were therefore not advanced further into the study, precisely in accordance with standard of practice for clinical trials. To compensate for the samples that could not be included in the study and ensure sufficient power, Immunovia added samples initially allocated to the validation study. The samples that did not fulfil inclusion criteria, therefore not advanced, are NOT outliers. Referring these samples as “outliers” is a highly inaccurate statement regarding the verification study design. Outliers are, per definition, samples which after inclusion and testing are excluded afterwards from the analysis and presentation of results. Immunovia has not excluded any data from analyses and has as such no “outliers”.

The delay of sales start with 3 months is due to extended timeline for the validation study. Additional samples are needed to compensate for the number that went into the verification study.  As COVID-19 infections are on the rise, there is a drop in sampling rate, thus extending the timeline. While disappointing, the 3-month delay does not impact the investment case! With sales start end of Q1 2021, Immunovia will still be first to market with an outstandingly accurate blood-based test for early detection of pancreatic cancer, with competition likely several years behind and serving as a perfect strategic fit for the larger, resourceful US players advanced in genomics-based tech.

The delay’s impact on our valuation model is negligible, and we maintain our target price of SEK 300 per share.

Timeline: Validation study Q4 2020-Q1 2021, Sales start end of Q1 2021.

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This is a press release from Vator Securities:


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