Infinity Pharmaceuticals Inc. (NASDAQ: INFI) is an innovative biopharmaceutical company dedicated to advancing novel medicines for people with cancer. Infinity is developing IPI-549, an oral immuno-oncology development candidate that selectively inhibits PI3K-gamma. A Phase 1 study in patients with advanced solid tumors is ongoing.
Wells Fargo recently upgraded Infinity Pharmaceutical from “Market Perform” to “Outperform” with a revised price target of $5.00 (from $1.50). The firm is extremely bullish on the company, followed by the selection of IPI-549 monotherapy data as a late-breaker oral presentation at SITC annual meeting next month.
The analyst comments “basis prior SITC late breaker data, Wells Fargo, foresee a likelihood of proof-of-concept response rate data, and with likely validation of tumor macrophage targeting in immunooncology (IO) and a unique mechanism of action, we see significant upside potential not reflected at present stock price level.”
On October 12th, the company announced that an abstract describing new data for IPI-549, an orally administered immuno-oncology development candidate that selectively inhibits phosphoinositide-3-kinase gamma (PI3K-gamma), has been selected as a late-breaking presentation during an oral session at the 2017 Society for Immunotherapy of Cancer (SITC) Annual Meeting taking place in National Harbor, MD, November 10 – 12.
Additionally, a clinical trial in progress poster will also be presented on the Phase 1/1b clinical study which is ongoing to explore the safety and activity of IPI-549 both as a monotherapy and in combination with Opdivo® (nivolumab), a PD-1 immune checkpoint inhibitor, in patients with advanced solid tumors. IPI-549 is believed to be the only PI3K-gamma inhibitor in clinical development.
This comes after news in September that INFI was expanding its present synergies with Bristol-Myers Squibb (BMY). Both the firms were exploring IPI-549 in combination with Opdivo and decided to now include patients with triple negative breast cancer who have not been previously exposed to anti-PD-1 or anti-PD-L1 therapy.
So far financials are concerned, for the second quarter the company announced cash and equivalents of $66.2 million and the net loss of $17 million. Furthermore, the net loss guidance for 2017 is in the range of $40 million to $50 million, while year-end cash balance should oscillate between $40 million to $50 million.
After these developments, shares of Infinity Pharmaceuticals have already risen significantly. Despite this, traders and investors seem to be pricing INFI positively. The stock currently has an average rating of “BUY” and a consensus price target of $5. Considering present valuation, INFI is at an extremely favorable risk-reward position.
About the Company: Infinity is an innovative biopharmaceutical company dedicated to advancing novel medicines for people with cancer. Infinity is developing IPI-549, an oral immuno-oncology development candidate that selectively inhibits PI3K-gamma. A Phase 1 study in patients with advanced solid tumors is ongoing.
About IPI-549:
- Believed to be the only potent, oral, selective PI3K-g inhibitor in development
- Targeting macrophages is emerging as a compelling approach to reducing immunosuppression1
- Phase 1/1b clinical study ongoing
- Encouraging Phase 1 data reported at AACR Annual Meeting3
Summary of Phase 1 Data Presented at AACR’17
IPI-549 was well tolerated as a monotherapy and in combination with Opdivo®
–No dose-limiting toxicities
–No drug-related serious adverse events
–No drug-related adverse events led to treatment discontinuation
IPI-549 demonstrated favorable PK/PD properties
– Near-complete and sustained inhibition of PI3K-g at doses ≥ 20 mg QD
– Preliminary PK suggest IPI-549 is not affected by Opdivo
2017 IPI-549 Program Goals
Other recent announcements:
Agreement with Takeda Oncology amended: In July, Infinity amended its license agreement with Takeda Oncology for IPI-549. Under the amended agreement, Infinity will no longer have an obligation to pay Takeda future royalties on worldwide net sales of selective inhibitors of PI3K-gamma, including IPI-549. In exchange for eliminating the royalty obligation, Infinity issued to Takeda an unsecured $6.0 million convertible note that matures on July 26, 2018, and accrues interest at an annual rate of eight percent. The company is obligated to pay the principal amount together with any accrued interest on or before the maturity date in cash or in shares of Infinity common stock, at the election of Takeda.
Second quarter financial results:
Revenue: Infinity did not record any revenue during the second quarter of 2017. Revenue for the second quarter of 2016 was $9.5 million, all of which related to Infinity’s previous collaboration agreement with AbbVie Inc.
Net loss for the second quarter of 2017 was $17.0 million, or a basic and diluted loss per common share of $0.34, compared to net income of $53.0 million, or basic and diluted earnings per common share of $1.05, for the second quarter of 2016. During the second quarter of 2016, Infinity recorded a non-recurring gain on AbbVie opt-out of the duvelisib collaboration of $112.2 million.
Liquidity and financial flexibility: At June 30, 2017, Infinity had total cash and cash equivalents of $66.2 million, compared to $75.4 million at March 31, 2017. Cash used for operating activities during the second quarter of 2017 included payments of $0.8 million related to the company’s 2016 restructuring activities and $4.5 million related to exiting the company’s lease for 784 Memorial Drive.
2017 Financial Guidance (as of August 3, 2017):
- Net loss: $40 million to $50 million
- Year-end cash: $40 million to $50 million
- Cash runway into the first quarter of 2019
- Cash and investments at 6/30/17 (unaudited): $66.2 million
Based on its current operational plans, which excludes additional funding or business development activities, Infinity expects that its existing cash and cash equivalents at June 30, 2017, will be adequate to satisfy the company’s capital needs into the first quarter of 2019.
Key risk factors and potential stock drivers:
The company´s late-breaking oral presentation in November is an extremely important near-term catalyst.
The expanding collaboration with Bristol-Myers Squibb should be considered as a favorable milestone.
On the flip side, any sort of disappointing data in the current monotherapy and combination trials for IP-549, as well as adversities in enrolling patients along with other issues (especially safety concerns) could impinge the business profile of the company.
Although the company believes cash to last into the first quarter of 2019, but the risk of dilution is significant over the near to medium term.
Biotech space is a high-risk sector due to uncertainties associated with the novel drug development. Therefore, favorable outcome of the upcoming catalyst is necessary for the stock to retain its momentum. Any adversities related with the same could upset the stock performance significantly.
Stock Chart:
On Friday, October 20th, 2017, INFI closed at $2.28 on an average volume of 4.19 million shares exchanging hands. Market capitalization is $115.57 million. The current RSI is 56.29
In the past 52 weeks, shares of INFI have traded as low as $0.84 and as high as 3.84
At $2.28, shares of INFI are trading significantly above its 50-day moving average (MA) at $1.39 and above its 200-day MA at $1.89
The present support and resistance levels for the stock are at $2.21 & $2.40 respectively.
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