Having recently revealed interim topline results from its Phase 2 trial in Travelan, Immuron Ltd (NASDAQ:IMRN, ASX:IMC) is set to pursue a Phase 3 clinical trial of the over-the-counter immune supplement that helps in the reduction of travelers' diarrhea and minor gastrointestinal disorders.
Travelan has been specifically formulated to fight enterotoxigenic Escherichia coli (ETEC) — a type of E. coli bacteria found that commonly causes diarrhea in developing countries.
It does this by stopping ETEC from attaching to intestinal walls, neutralising the bacteria’s ability to cause diarrhoea, digestive upset, and other associated symptoms. Not just a reactive treatment, Travelan can be proactively taken before meals to prevent disease.
The Phase 2 trial found that a single dose of Travelan is effective in preventing moderate to severe diarrhea following a challenge with ETEC. During the trial, ETEC-induced moderate to severe diarrhoea was reduced by 36.4%, protective efficacy against severe ETEC-induced diarrhoea was 66.7%, and there was an 83.3% reduction of subjects needing early antibiotic treatment post-challenge.
Complete Phase 2 results are due later this year, but in the meantime, Immuron will proceed to hold an end-of-Phase 2 meeting with the FDA to discuss Phase 3 registration strategy and will explore funding for Phase 3.
Pitt Street expects Immuron to close the valuation gap with peers
Following news of the successful trial, Pitt Street Research published a research note on Immuron, noting that the positive results bode well for Immuron to pursue a Phase 3 clinical trial, which could be a catalyst for a re-rate.
PItt Street reiterated its prior valuation of A$0.25 per share in a base case scenario, and A$0.35 per share in a bull case scenario, asserting that “even with the recent re-rate following the results, [Immuron’s market value] is well below the valuation of other ASX companies in Phase 3 and we expect the gap to close in the coming months as the company moves towards Phase 3.”
Immuron is set to join an exclusive club
The research group says that by merely entering Phase 3, Immuron will be among an exclusive list of ASX biotech stocks in Phase 3.
“As observed in our recent reports on Prescient Therapeutics and Dimerix, there is precedent for companies to re-rate merely by entering Phase 3. Companies such as Opthea, Dimerix and Paradigm Biopharmaceuticals have market capitalisations of over $100 million, just by being in Phase 3.
“At less than $30 million, we think Immuron is underrated, before you even consider it has products in the market. We think the company can re-rate in the months ahead as it edges closer towards Phase 3.
Yet the Phase 3 Travelan trials are not the only potential share price catalysts in the works, which include clinical trials with its other assets and sales growth for Travelan, sold as a general dietary supplement.