BMO Capital has adjusted its stance on IGM Biosciences (IGMS), moving its rating from Outperform to Market Perform. This decision comes in the wake of IGM Biosciences' strategic update, which included the discontinuation of two of its drugs, imvotamab and IGM-2644, in the treatment of autoimmune diseases. The downgrade is accompanied by a significant reduction in the price target from $21 to $2.
The strategic update revealed that data from Phase 1b studies of imvotamab, which was being evaluated in patients with rheumatoid arthritis and systemic lupus erythematosus, showed insufficient B cell depletion. This outcome was unexpected, especially considering the mechanistic rationale behind the TCE-CD20 approach. BMO Capital highlighted the unpredictability associated with T cell mediated approaches in both cancer and autoimmune disease treatments.
Following this update, BMO Capital anticipates that IGM Biosciences' stock will trade at a level reflective of the company's cash position, indicating a cautious outlook on the stock's future performance.
