Vator Securities: Thou shall reimburse the one who finds the silent killer
It may seem trivial to point out by now, but an accurate distinction between surveillance and screening is important in order to properly understand IMMray PanCan-d’s intended use, clinical utility offer and the parameters of importance to access the viability of the test to be included in guidelines and gaining broad reimbursement. We still see confusion here.
Screening concerns high-incidence diseases and refers to testing of asymptomatic general population. Immunovia’s PanCan-d cannot be judged in this context since pancreatic cancer is a low-incidence disease where even a perfect test with 100% sensitivity and 99% specificity would not qualify for screening. Surveillance, on the other hand, concerns low-incidence diseases such as pancreatic cancer and refers to testing of asymptomatic individuals at high risk of developing disease. Pancreatic cancer is called the “Silent Killer” because, well, it’s silent with very late symptoms. When found with available modalities, it’s unfortunately too late. Therefore, you have to keep the high-risk groups under surveillance. IMMray PanCan-d is being developed for this purpose, targeting niche risk groups.
There are currently no guidelines recommending surveillance of the symptomatic and NOD risk groups – hardly surprising given existing diagnostic modalities. New medical technologies drive the development of guidelines – not the other way around, and the IMMray PanCan-d minimally invasive simple blood test offers a credible potential to overcome the drawbacks of logistics, cost, invasiveness, and lower accuracy associated with current modalities that impedes routinely, early detection and expansion of guidelines to cover risk groups other than familial/hereditary.
IMMray PanCan-d will first be rolled out for surveillance in familial/hereditary risk group, where standard surveillance imaging is already covered today by both commercial payors and Medicare – according to regulatory consultants, KOLs and experts in pancreatic disease treatment and research in the US. According to the experts working with surveillance of the familial/hereditary risk patients, the landscape for coverage of surveillance for high-risk patients has evolved and improved considerably over the last 10+ year, which can be attributed to the inclusion of surveillance in CAPS guidelines. Payer pushback has decreased significantly over the 5 past years. As such, we believe that the path to coverage of PanCan-d is not a walk in the park, but the road is straightforward.
Based on all the noise that was created around the story about Immunovia, the opportunities in NOD and symptomatic risk groups have been entirely excluded in the pricing of the share, currently trading below the value of the initial opportunity in familial/hereditary risk group according to our DCF valuation. We see a significant short-term upside to today’s pricing of the company as sales start approaches. We maintain the Outperform rating and a target price of SEK 300 per share, corresponding to an equity value of SEK 6.8bn non-diluted. Our target price is derived from a DCF valuation of the opportunity in pancreatic cancer. The pipeline programs in lung cancer and rheumatoid arthritis provide further upside potential.
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Marketing material commissioned by Immunovia AB.