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I-Mab (IMAB) Down After Partner AbbVie Revises Partnership Deal

·3-min read

Shares of I-Mab IMAB were down 14.3% on Aug 17 after management disclosed in an SEC filing that the company’s partner AbbVie ABBV has decided to discontinue a phase Ib study evaluating lemzoparlimab, its anti-CD47 antibody, in myelodysplastic syndrome (MDS) and acute myelocytic leukemia (AML) indications.

Though the reason for AbbVie arriving at this decision was not revealed, it was not based on any safety concerns.

Alongside the above announcement, I-Mab also disclosed that it had amended the terms of its partnership deal with AbbVie. The original deal, inked in September 2020, relates to the development and commercialization of I-Mab’s lemzoparlimab targeting multiple types of cancer.

Originally, I-Mab was eligible to receive $1.74 billion in potential milestone payments from AbbVie for lemzoparlimab. Following the amendment, I-Mab will now be eligible to receive up to $1.295 billion in potential milestone payments for new anti-CD47 antibodies which are currently undergoing development. The terms of the deal with regard to other licensed products still remain the same. I-Mab will continue to hold the exclusive right to develop and commercialize the new CD47 antibody therapies in Greater China.

This revision in the deal has not only led to a decline in milestone payments by more than $400 million to I-Mab but also delayed the receipt of the potential milestone payments. In fact, I-Mab will now have to dedicate time and resources to developing a new candidate to meet AbbVie’s standards to earn these payments.

Shares of IMAB were most likely down due to the reduction in potential milestone payments receivable from AbbVie coupled with the discontinuation of the early-stage study on lemzoparlimab. The stock has plunged 85.6% in the year so far compared with the industry’s 17.7% fall.

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Zacks Investment Research


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I-Mab continues to evaluate lemzoparlimab in clinical studies. Per management, the candidate has demonstrated a good safety profile in early-stage and mid-stage clinical studies. The company intends to move lemzoparlimab into late-stage development to treat MDS in China using its cash resources, which it deems sufficient to support all its ongoing and planned clinical studies.

IMab Sponsored ADR Price

 

IMab Sponsored ADR Price
IMab Sponsored ADR Price

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Zacks Rank & Stocks to Consider

I-Mab currently carries a Zacks Rank #4 (Sell). A couple of better-ranked stock in the overall healthcare sector include Morphic MORF and Sesen Bio SESN, each of which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, estimates for Morphic’s 2022 loss per share have narrowed from $3.47 to $1.75. Loss estimates for 2023 have narrowed from $3.96 to $3.77 during the same period. Shares of Morphic have lost 34.7% in the year-to-date period.

Earnings of Morphic beat estimates in three of the last four quarters and missed the mark just once, witnessing a surprise of 48.29%, on average. In the last reported quarter, MORF delivered an earnings surprise of 183.95%.

Estimates for Sesen Bio’s 2022 bottom line have narrowed from a loss of 44 cents to 43 cents in the past 30 days. Loss estimates for 2023 have narrowed from 35 cents to 1 cent during the same period. Share prices of Sesen Bio have fallen 15.6% in the year-to-date period.

Earnings of Sesen Bio beat estimates in each of the last four quarters, the average surprise being 89.49%. In the last reported quarter, Sesen Bio delivered an earnings surprise of 61.54%.


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