ROIV - Immunovant Stock: With Anti-FcRn Validation Continuing This Is A Must-Watch

2023-07-19 17:50:15 ET

Summary

• Immunovant, Inc. received additional validation with anti-FcRn achieved as competitor argenx achieves primary endpoint in phase 2 study using VYVGART for the treatment of patients with CIDP.
• Immunovant expects to release results from its phase 2b study using batoclimab for the treatment of patients with CIDP in the 1st half of its calendar year 2024.
• Initial data from a study using IMVT-1402, in single ascending dose cohorts and multiple ascending dose cohorts, are expected in the coming months; August/September and October/November 2023 respectively.
• There are several companies which are advancing their own FcRn inhibitor against autoimmune disorders; IMVT-1402 holds the potential to be a best in class in the anti-FcRn space, with its unique profile.

Immunovant, Inc. ( IMVT ) is a biotech that had made great progress with a few of its programs. One quick item to note is that Immunovant is a subsidiary of Roivant Sciences Ltd. ( ROIV ). I believe that this is a biotech to watch, because it is working on developing a drug that is an anti-FcRn blocker, specifically designed to go after autoimmune disorders.

What makes this statement important is because another pharmaceutical company by the name of argenx SE ( ARGX ) validated the use of a drug known as VYVGART Hytrulo, which contains efgartigimod alfa as the FcRn blocker along with hyaluronidase-qvfc. The use of this drug was validated in that the primary endpoint was met in the phase 2 ADHERE study. This bodes well for Immunovant, because like Argenx it is advancing its own FcRn blocker known as IMVT-1402. Even better, it has another FcRn blocker in its pipeline known as batoclimab.

Immunovant believes that great synergy can be achieved with the advancement of both of these clinical drugs in its pipeline. Batoclimab might reach the market quicker, since it is in more advanced stages against several indications.

However, having a second FcRn blocker in its pipeline is not bad at all. While argenx will no doubt be a competitor it continues to validate the approach of using an FcRn blocker to treat a multitude of autoimmune disorders. Initial data from a phase 1 study for single-ascending dose cohorts of IMVT-1402 is expected to be released in August/September of 2023. Thereafter, initial data from the multiple ascending dose cohorts is expected in October/November of 2023.

What makes Immunovant a must-watch besides this advancement is that multitude of data readouts coming over the next few years. With respect to targeting chronic inflammatory demyelinating polyneuropathy [CIDP], it is using batoclimab to target these patients in an ongoing phase 2b study, with an expected data readout in the 1st half of calendar year 2024.

Continued FcRn Inhibitor Validation From Competitor Is Also Good News For Immunovant

As I stated above, argenx had reported positive results from its phase 2 ADHERE study , which evaluated the use of VYVGART Hytrulo [efgartigimod alfa and hyaluronidase-qvfc] for the treatment of patients with chronic inflammatory demyelinating polyneuropathy [CIDP]. With efgartigimod being an FcRn inhibitor, this is also good news for Immunovant.

Before diving into the data, it is important to highlight what this disorder is. CIDP is a chronic neurological disorder that involves progressive weakness and senses in the legs and arms. What happens is that damage occurs on the fat-based protective covering on the nerves, called myelin sheath. There are several symptoms that these patients experience such as:

• No feeling in fingers.
• No feeling in toes.
• Weakness of both legs and arms.
• Loss of muscle stretching.
• Fatigue.
• Unusual tingling feeling in the body.

The mid-stage ADHERE study was a randomized, double-blind, placebo-controlled study which enrolled a total of 322 adults with CIDP. One item to point out is that these were patients who were treatment naive [not on active treatment within the past 6 months or were newly diagnosed] or being treated with immunoglobin therapy or corticosteroids. The trial consisted of two stages, which were as follows:

• Stage A - Open-label study period.
• Stage B - Randomized, placebo-controlled portion of the study.

For the patients who responded in Stage A of the study, they were able to enter into the Stage B randomization portion. The primary endpoint of this study was "time to first adjusted INCAT deterioration compared to Stage B Baseline," which was evaluated over a 48-week period.

Before diving into the data, it's important to understand what the INCAT measure is. INCAT stands for "Inflammatory Neuropathy Cause and Treatment." This measures a person's disease, by assessing both the arms and legs, whereby patients receive a 0 to 5 score for the arms an then a 0 to 5 score for the legs as well. With "0" meaning no disability noted and "5" representing no arm function or inability to stand/walk. The primary endpoint was met in that treatment with VYVGART Hytrulo was able to achieve a 61% reduction in the risk of relapse compared to placebo based on time to first adjusted INCAT deterioration of ?1 point. This primary endpoint was met with statistical significance with a p-value of p=0.000039.

Anti-FcRn Technology Is Ideal For Immunovant With Two Shots On Goal

The thing is that with argenx continuing to stablished proof of mechanism of action in advancing anti-neonatal FC receptors [anti-FcRn], it provides a clear path for success of Immunovant as well. What happens is that harmful immunoglobulin G [IgG] autoantibodies are good when they are targeting foreign invaders. However, as you know with autoimmune disorders, it is where the patient's immune system starts to attack their body. Well, in such a way, harmful IgG autoantibodies bind to healthy human tissues, thus causing a variety of disorders.

Immunovant is advancing two clinical candidates, which are known as batoclimab and IMVT-1402 as anti-FcRn to go after a broad range of autoimmune disorders. FcRN prevents IgG autoantibodies degradation, thus leaving them to circulate the body freely. Well anti-FcRn inhibitors were developed to be able to enact degradation of free-roaming IgG autoantibodies in the system. The hope of accomplishing this is to be able to treat a multitude of autoimmune disorders.

How does argenx's phase 2 ADHERE study help Immunovant? It establishes proof that anti-FcRn inhibition is capable of being able to help patients with CIDP and other autoimmune disorders. Another thing is that argenx receive marketing approval of VYVGART as the first and only FDA approved neonatal FC receptor blocker for generalized myasthenia gravis [MG] back in December of 2021. However, at that time, this was an intravenous infusion of VYVGART that was approved. Since then, in June of 2023, it obtained approval to offer a subcutaneous version of this drug instead.

Thus, this shows that Immunovant will have the ability to be able to target CIDP, MG and other autoimmune diseases. For instance, these are trial results that it expects to release within the next few years, which could establish additional proof of concept in using its FcRn inhibitor batoclimab for the treatment of patients with autoimmune disorders. Such catalysts are:

• Results from period 1 of the phase 2b study using batoclimab for the treatment of patients with CIDP expected in the 1st half of calendar year 2024.
• Results from phase 3 study using batoclimab for the treatment of patients with MG in the 2nd half of calendar year 2024.
• Results from phase 3 study using batoclimab for the treatment of patients with thyroid eye disease [TED] in the 1st half of calendar year 2025.
• Results from phase 2 proof of concept study using batoclimab for the treatment of patients with Grave's Disease [GD] in the 4th quarter of calendar year 2023.

However, as I stated above, Immunovant is advancing a second FcRn inhibitor. The second FcRn inhibitor is known as IMVT-1402 and it is believed to be even better than batoclimab. In a head-to-head, placebo controlled nonclinical study, IMVT-1402 was shown to achieve similarly deep IgG reduction as batoclimab. Not only that, but it had a far more minimal impact on levels of albumin and low-density lipoprotein cholesterol at doses well above the anticipated human effective dose.

If IMVT-1402 works out in trials, then it could be a best-in-class FcRn inhibitor. Such a statement can be taken from a Truist Securities analyst who stated that they believe IMVT-1402's "unique profile make it a best-in-class anti-FcRn with the ability to take significant shares across multiple autoimmune indications."

Having said that, Investors looking to get into Immunovant don't have to wait long to see some preliminary data from IMVT-1402. That's because initial data from single-ascending dose cohorts are expected in August/September of 2023. Then, initial data from the multiple ascending dose [MAD] cohorts are expected in October/November of 2023. I believe that should IMVT-1402 ultimately show to be a safer and more efficacious alternative to VYVGART, then it can easily compete in the FcRn inhibitor space. Especially, since like VYVGART, IMVT-1402 can be given as a subcutaneous injection. It would be able to capture a huge chunk of the autoimmune disorder market.

Financials

According to the 10-K SEC Filing , Immunovant had cash and cash equivalents of $376.5 million as of march 31, 2023. It is believed that Immunovant has enough cash to fund its operations into the 2nd half of calendar year 2025.

One part of the reason of the cash on hand is that in October of 2022, it completed an underwritten offering of 12,500,000 shares of its common stock [including 416,677 shares of its common stock purchased by RSL] at an offering price of $6 per share. This resulted in net proceeds of $70.2 million after deducting underwriting discounts and commissions and offering expenses. It has raised cash to date with the sale of convertible promissory notes.

This biotech does have another option to raise cash, one it has not used as of yet. In January of 2021, it filed a shelf registration statement on Form S-3 with the SEC, whereby it could offer, issue and sale of up to a maximum aggregate offering price of $900 million of its common stock. Of which, $10 million may be issued and sold pursuant to an at-the-market [ATM] offering program for sales of its common stock under a sales agreement with Leerink LLC. Thus far, Immunovant has not issued or sold any securities pursuant to this ATM offering program.

Risks To Business

There are several risks that investors should be aware of before investing in Immunovant. The first risk to consider would be with respect to the ongoing advancement of batoclimab, which is being explored in several studies for a variety of indications. There is no assurance that the use of this drug will be successful against all autoimmune disorders being targeted. A good thing is that it has another anti-FcRn inhibitor that it is working on, which is IMVT-1402.

Which brings up a second risk, which is the expected data to be released in the coming months. As I stated above, there will be some preliminary data to be released from a study exploring the use of IMVT-1402 in August/September 2023 and then again in October/November 2023. There is no guarantee that this initial data to be released for IMVT-1402 will be positive. In addition, there is no assurance that the stock market will view such released data in a positive manner.

A third risk to consider would be with respect to both batoclimab and IMVT-1402 with respect to licensing. That's because the use of both of these drugs are contingent upon a licensing agreement with HanAll. Thus, if for whatever reason the license agreement is terminated, that would mean the inability to sell either batoclimab or IMVT-1402 on the market.

A fourth risk to consider would be with respect to competition in the anti-FcRn space. That's because, as I noted above, argenx is developing VYVGART for a variety of autoimmune disorders and this will be a major competitor going forward. Not only that, but there are a few other companies who are working on advancing their own FcRn blocker in the clinic. Johnson & Johnson ( JNJ ) is advancing an anti-FcRn inhibitor known as nipocalimab for autoimmune disorders. It was able to nab its hands on an anti-FcRn inhibitor thanks to its acquisition of Momenta for $6.5 billion .

It seems like this asset may pay off as it continues in the clinic with it. Back in February of this year, it reported positive results from a phase 2 study using nipocalimab in pregnant individuals at high risk for severe hemolytic disease of the fetus and newborn [HDFN]. In addition, UCB is also in this anti-FcRn space with rozanolixizumab [RYSTIGGO]. RYSTIGGO was approved by the FDA to treat adult patients with generalized myasthenia gravis [gMG] who are anti-acetylcholine receptor or anti-muscle-specific tyrosine kinase antibody positive.

Conclusion

Immunovant is in great shape as it, like a few other companies, is advancing batoclimab for the treatment of autoimmune disorders. However, should advancement with IMVT-1402 go well, then it has the possibility of having a best-in-class anti-FcRn drug. The positive data released from argenx from its phase 2 study, using VYVGART for the treatment of patients with CIDP, reinforces the mechanism of action of using an FcRn blocker to treat autoimmune disorders.

Immunovant expects to release results from its phase 2b study using batoclimab for the treatment of patients with CIDP in the 1st half of its calendar year 2024. With respect to IMVT-1402 data, investors won't have to wait long. Data from the single-ascending dose cohorts and multiple-ascending dose cohorts are expected to be released in the coming months. With FcRn inhibition proof-of-concept being established with a few other competitors, plus the ability for Immunovant to advance two anti-FcRn inhibitors, I believe that investors might be able to capitalize on any potential gains made.

For further details see: