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As it clocks one year returns down -72%, Imugene Ltd (ASX:IMU) this week issued a letter to shareholders confirming shareholders’ worst fears – yes, the company is a high cash burn business.
That isn’t this finance journalist – once-described by HotCopper users as “self-satisfied” – niggling for the sake of it. Imugene itself came right out and said it. See for yourself:
The letter was, in effect, an addressing of dominant concerns surrounding the much-loved biotech stock in light of its recent performance metrics.
“The reality is that in fact we are [a high cash burn business],” Imugene wrote, responding to criticisms about the stock that have become common in relatively recent history.
Imugene also addressed the short position against the stock, ultimately concluding such matters are out of the company’s control. (For all intents and purposes, in Imugene’s defence, that’s true.)
But there were more micro-level concerns addressed by the company on Thursday.
When it comes to the company’s CF33, OnCARlytics and HER-Vaxx products, the company pointed to slow progress overall driven by the realities of biotech development.
“It is correct that data read outs are a little slower than expected,” Imugene wrote.
“In the MAST CF33 study, we spent some time streamlining manufacturing [and] focused enrolment on specific indications … which impeded enrolment.
“On the onCARlyrics study, this involves bringing two separate areas of oncology together … this requires educating and training the solid tumour specialist … and more time and effort at the hospital.”
Time and effort doing what, exactly, wasn’t specified
The letter could, depending on how you interpret it, read like a respectful and transparent disclosure to a retail shareholder base. If you were inclined to be more cruel, however, one might suggest it’s an announcement designed to reassure.
In what is most probably the truth, both things are true at once.
Consider the tone the letter used when discussing HER-Vaxx:
“We have not yet signed a deal with any of our programs … lack of news does not mean we are doing nothing,” Imugene wrote.
“We are actively marketing at all the major industry conferences around the world.”
When it comes to shareholder communications, the company also noted it released 27 announcements to the market this year so far. Make of that what you will.
IMU last traded at 2.3cps.
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