On Thursday, UBS initiated coverage on Immunocore Holdings (NASDAQ: IMCR) stock with a Sell rating and set a price target of $24.00. The coverage comes with a cautious outlook on the company's revenue growth prospects. UBS notes that the potential for revenue increase from Kimmtrak, Immunocore's treatment for front-line metastatic uveal melanoma, is modest. Additionally, the firm points out the absence of near-term growth drivers, as significant clinical updates for cutaneous melanoma and adjuvant uveal melanoma are not expected for at least two years.
The firm also expresses concern over potential competition from Ideaya Biosciences' darovasertib, which is anticipated to receive approval in 2026 for uveal melanoma. This could put commercial pressure on Kimmtrak. UBS further highlights the high clinical risk associated with brenatafusp, Immunocore's treatment in Phase 3 trials for 1L advanced cutaneous melanoma, indicating that the trial could fail to meet its endpoints.
UBS projects that the risk-adjusted peak sales for Kimmtrak and brenatafusp will reach $771 million, which is lower than the consensus estimate of $1.1 billion. This projection takes into account the potential market challenges and clinical risks identified by the firm. The Sell rating and price target reflect UBS's cautious stance on the stock's performance potential based on the current outlook for Immunocore's product pipeline and market dynamics.
In other recent news, Immunocore Holdings has been the focus of several analyst ratings based on its recent clinical trial data and financial growth. H.C. Wainwright maintained a Buy rating on the company, following data from a clinical trial of the drug candidate brenetafusp. Oppenheimer also reiterated an Outperform rating, influenced by the promising clinical data of brenetafusp for treating platinum-resistant ovarian cancer. TD Cowen and Mizuho maintained their positive ratings as well, reflecting confidence in the company's trajectory.
Immunocore's financial growth was highlighted by a 34% increase in net sales of its oncology product, KIMMTRAK, reaching $146 million in the first half of the year, supplemented by a 7% increase in Q2 revenues. However, the company also announced the upcoming departure of its CFO, Brian Di Donato, initiating a search for his replacement.
The company is conducting several clinical trials, including the TEBE-AM trial evaluating KIMMTRAK in advanced cutaneous melanoma patients and the PRISM-MEL301 trial, evaluating another T cell receptor bispecific immunotherapy, brenetafusp. These developments demonstrate the company's commitment to innovation in the oncology sector.
InvestingPro Insights
Adding to UBS's cautious outlook on Immunocore Holdings (NASDAQ: IMCR), recent data from InvestingPro provides further context to the company's financial situation. Despite a robust revenue growth of 27.95% over the last twelve months as of Q2 2024, Immunocore is not currently profitable, with a negative operating income of $74.6 million for the same period. This aligns with one of the InvestingPro Tips, which indicates that analysts do not anticipate the company will be profitable this year.
The stock's performance has been challenging, with a significant 45.24% decline over the past six months. This drop is reflected in another InvestingPro Tip, which notes that the stock has taken a big hit over the last six months. However, it's worth mentioning that Immunocore holds more cash than debt on its balance sheet, potentially providing some financial flexibility as it navigates through its product development phases.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Immunocore Holdings, which could provide valuable insights into the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.