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Was the Immunomedics Sell-Off Too Extreme?

Belgian pharmaceutical group UCB announced Tuesday morning that its phase 3 trial for lupus treatment epratuzumab failed to produce statistically significant results in both dosages tested in Systemic Lupus Erythematosus (SLE). The developer said that neither of the two doses used in the identical, late-stage trials proved statistically superior to a placebo. This is not good news for Immunomedics Inc. (NASDAQ: IMMU).

For some background, UCB had licensed epratuzumab from Immunomedics to treat lupus, an autoimmune disease where the body’s immune system attacks healthy organs; it affects 5 million people around the world.

So far, epratuzumab is only an investigational medicine and is not approved for the treatment of SLE by any regulatory authority worldwide. It is a monoclonal antibody to target CD22, a protein that modulates B-cells, key components of the immune system that can play a central role in the pathogenesis of SLE if they become overactive.

Professor Dr. Iris Loew-Friedrich, Chief Medical Officer and Executive Vice President of UCB, commented on the failed trial:

Although we are disappointed with the results from the Phase 3 program, our commitment to the lupus community remains. We are focused on developing new therapies for the treatment of immunological conditions including SLE and have another SLE drug in clinical development. We would like to express our sincere thanks to the patients and clinical investigators who made the EMBODY program possible. It has produced a comprehensive dataset and we look forward to sharing the findings with the scientific community. Today’s news does not alter UCB’s strategy as we remain committed to delivering value for patients living with lupus and other immunologic diseases.

The question on investors’ minds now is that: if UCB can’t get Epratuzumab off the ground does Immunomedics stand a chance of doing so as well?

Shares of Immunomedics were down 34.2% at $2.44 on Tuesday morning. The stock has a consensus analyst price target of $7.00 and a 52-week trading range of $1.83 to $5.48. It’s worth noting that shares have not traded this low since 2009.

By Chris Lange