Immunomedics Downgraded At Jefferies, Firm Removes Epratuzumab Revenues From Model

In a report published Wednesday, Jefferies analyst Chris Howerton downgraded the rating on

from Buy to Hold, while reducing the price target from $6 to $2, after the company's partner reported disappointing results of epratuzumab trials. Analyst Chris Howerton pointed out that Immunomedics partner

(rated: Underperform, with PT at €52) announced that "both doses of epratuzumab in both Ph 3 EMBODY trials for lupus missed on the primary endpoint of improvement in BICLA score at 48 weeks compared to placebo." "Although there are few details at this point, we believe UCB will likely discontinue this program given the clearly negative outcome," Howerton mentioned, while adding that all epratuzumab revenues had been removed from the Jefferies model. Immunomedics is likely to provide an update on its plans only after UCB evaluated the data. The update is expected at the company's FY15 earnings call. In the report Jefferies noted, "…the strongest pipeline potential for IMMU lies in IMMU-132 for TNBC, where 2 complete responses (CR) has been observed and positive progression free survival (PFS) benefits of up to 6.0 months. At this time, mgmt is determining the registration path forward in discussions with the FDA (likely in TNBC), and is actively seeking a partner prior to initiating any phase 3 trials." Potential risks to Immunomedics' performance include clinical trial failure and risks related to regulatory approvals and commercial launch.