Monday Biotech Movers: Immunomedics, Inc. (NASDAQ:IMMU), Puma Biotechnology Inc (NASDAQ:PBYI) and Ocular Therapeutix Inc (NASDAQ:OCUL)

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With the earnings-induced volatility that we saw in the biotechnology space last week a number of companies enter this week on the back of noteworthy shifts in valuation. Here’s a look at three of the biggest movers, what’s moving each and where we expect things to go near term.

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The three companies in question are Immunomedics, Inc. (NASDAQ:IMMU), Puma Biotechnology Inc (NASDAQ:PBYI) and Ocular Therapeutix Inc (NASDAQ:OCUL).

First up, Immunomedics.

This one is a little complicated. The company is an oncology stock that is developing a drug called sacituzumab govitecan, or more commonly IMMU-132. It’s a breast cancer asset (initially) and its primary indication right now is a type of breast cancer called metastatic triple-negative breast cancer (TNBC). It’s a dramatically underserved area of oncology and – to date – data from the program suggests that 132 could be a potential game changing option for patients in this population.

Immunomedics carried the drug through to phase II and then, earlier this year, put together a license agreement with Seattle Genetics (NASDAQ:SGEN) that saw the latter pick up the rights to 132 for $250 million cash and an additional $1.7 billion in milestones. The deal also included a commitment by Seattle to pick up a 9.9% stake in Immunomedics, with a $57 million equity investment.

When the deal was announced, however, things didn’t go quite to plan.

Shareholders basically revolted against the deal (led by an activist fund called VenBio), suggesting that it undervalued the drug. The whole thing went to court and the latest news is that the shareholders have successfully stopped the deal going through. Immunomedics will keep the rights to the drug, Seattle will keep its equity stake, and the former will go it alone on the development.

Markets are seeing this as favorable and Immunomedics is picking up strength as a result. At last close, the company went for circa $6.36 – a close to 20% premium on its pre-news price.

Next up, Puma.

This one’s a bit of an odd one. The company just announced that its Senior Vice President, Regulatory Affairs and Project Management, called Dr. Robert Charnas, will be resigning for health reasons effective May 15, 2017.

Normally this sort of thing isn’t too big a deal. Markets never like to see key people forced into resignation for health reasons, of course, but the response isn’t generally more than a blip in the long term momentum. On the back of this announcement, however, Puma has taken a more than 16% hit.

Why?

Because Puma is set to appear before the Oncologic Drugs Advisory Committee (ODAC) on May 24, 2017, with the meeting rooted in its New Drug Application (NDA) for drug candidate neratinib as an extended adjuvant treatment of early stage HER2-positive breast cancer. That the Regulatory Affairs lead should resign just before a meeting like this has markets asking questions as to the real reason for his departure, and this uncertainty is filtering through to the company’s risk profile.

Nothing is confirmed, of course. On the record, markets have to take the health reasons announcement as truth. Under the surface, however, doubts are circling, and therein lies the weight on the stock right now.

Finally, Ocular.

This one’s a little more in line with the standard biotechnology event driven action we’re used to seeing. The company has an NDA with the FDA for a drug called Dextenza, which it’s trying to get approved for the treatment of ocular inflammation and pain following cataract surgery. The FDA issued a CRL in July last year citing manufacturing deficiencies as the driver behind the issue. Ocular resolved the issues and resubmitted, and the FDA set a PDUFA of July 19. Now, however, the agency has issued what’s called a Form 483 to Ocular. The agency issues these forms after an inspection (in this case, of the manufacturing facility for Dextenza) and the company receiving the form has to respond in writing with a plan for resolution (and then get the resolution actioned).

Ocular is going to have to be quick if it’s going to get its ducks in a line before the PDUFA for the drug, and it’s the uncertainty associated with this situation that’s moving the stock right now.

The company is down around 16% and looks set to lose strength further during the early week’s trading.

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