Leerink cuts Immune Design to MP; PT to $3 from $7

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Leerink downgraded Immune Design (NASDAQ:IMDZ) to “market perform” from “outperform” and cut its price target to $3 from $7 after the company deprioritizedlead program, CMB305, a therapeutic cancer vaccine targeting NY-ESO-1, and said it would focus development on G100, a TLR4 agonist. The stock closed at $2.79 on Oct. 11.

“The decision followed a portfolio prioritization effort that included an early ad hoc review of the ongoing Phase 2 study that showed the CMB305 plus Tecentriq combination is unlikely to show a survival benefit in relapsed synovial sarcoma patients,” writes analyst Jonathan Chang.

Given the disappointing CMB305 analysis, in addition to broader portfolio considerations, he said Immune also decided to discontinue the Phase 3 SYNOVATE study of CMB305 in synovial sarcoma.

“While the CMB305 update is disappointing, we view the strategic decision to focus development on G100 positively due to the improved impact on the company's cash runway (now into 2021 vs. into the second half of 2020 previously),” Mr. Chang said.

“We believe many investors already had very low expectations for CMB305,” he added. “However, in the context of past disappointments that have pressured Immune shares, we believe this recent update could add to investor concerns on company execution, which has been a critical part of the Immune story.”

Melane LaBelle Sampson