On Friday, Truist Securities revised its price target for IGM Biosciences (NASDAQ:IGMS) shares, significantly reducing it to $2.00 from the previous $12.00 while maintaining a Hold rating on the stock. The adjustment followed IGM Biosciences’ announcement that they would be halting development on two of their drug candidates, imvotamab and IGM-2644.
This decision leaves the biotech firm, currently valued at $113 million, with only its collaboration with Sanofi (NASDAQ:SNY) as its active pipeline. According to InvestingPro data, the stock has fallen significantly over the past three months, now trading near its 52-week low of $1.93, compared to its high of $22.50.
IGM Biosciences’ discontinuation of the two drugs represents a setback for the company, which had been working on treatments for B-cell related autoimmune diseases. InvestingPro analysis reveals the company is quickly burning through cash, with negative EBITDA of $224 million in the last twelve months.
According to Truist Securities, the failure of these drug candidates is more likely a reflection of issues specific to IGM Biosciences’ platform rather than indicative of a broader risk to the T-cell engager class of drugs. InvestingPro subscribers have access to 10 additional key insights about IGMS’s financial health and market position.
The firm’s analysts suggest that the negative outcomes associated with imvotamab and IGM-2644 should not be seen as having implications for other T-cell engagers currently in development. The decision to lower the price target was based on these recent developments within IGM Biosciences, rather than a reflection on the potential of the T-cell engager class as a whole. Despite these challenges, InvestingPro data shows the company maintains a strong liquidity position with a current ratio of 5.22, indicating sufficient assets to meet short-term obligations.
IGM Biosciences’ focus will now likely shift to their ongoing collaboration with Sanofi, which remains as the sole project in their pipeline after the termination of their other drug development programs. The company’s future prospects and potential for recovery hinge on the success of this partnership.
The reduction in the price target to $2.00 from the previous $12.00 underscores the challenges faced by IGM Biosciences in light of the recent discontinuations. Investors holding IGM Biosciences stock will now be watching closely to see how the company adapts to these changes and how it will leverage its collaboration with Sanofi to rebuild its pipeline and regain momentum.
In other recent news, IGM Biosciences has halted the development of two of its autoimmune treatments, Imvotamab and IGM-2644, leading to significant reactions from analysts. Morgan Stanley (NYSE:MS) downgraded the biotechnology company’s stock to Underweight, while Stifel analysts revised their rating from Buy to Hold.
Additionally, RBC Capital Markets and BMO Capital Markets both adjusted their stance on the company’s stock, downgrading it from Outperform to Sector Perform and Market Perform, respectively.
These revisions were triggered by the company’s decision to discontinue development on the aforementioned drug candidates. As a direct response to these developments, IGM Biosciences announced a workforce reduction of 73%. The company is also exploring strategic alternatives as it navigates through a period of reassessment and strategic planning.
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