This speculative ASX stock could almost double in value

Bell Potter thinks investors could almost double their money with this high risk option.

| More on:
A woman jumps for joy with a rocket drawn on the wall behind her.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Every investor has a different risk appetite. Some investors play it safe and buy low risk, defensive ASX stocks. Others are willing to risk a little for stronger potential returns. And a handful will seek the huge potential returns on offer from the speculative side of the market.

If you're in the latter category, then it could be worth checking out the speculative ASX stock in this article.

That's because the team at Bell Potter believes that it has the potential to almost double in value from current levels.

Which speculative ASX stock?

The company in question is Immutep Ltd (ASX: IMM). It is a $520 million, clinical-stage biotechnology company developing novel Lymphocyte Activation Gene-3 (LAG-3) immunotherapy for cancer and autoimmune disease.

Immutep's eftilagimod alfa (efti) product is its proprietary soluble LAG-3 protein and MHC Class II agonist that stimulates both innate and adaptive immunity for the treatment of cancer.

Management notes that as a first-in-class antigen presenting cell (APC) activator, efti binds to MHC (major histocompatibility complex) Class II molecules on APC leading to activation and proliferation of CD8+ cytotoxic T cells, CD4+ helper T cells, dendritic cells, NK cells, and monocytes.

It also upregulates the expression of key biological molecules like IFN-ƴ and CXCL10 that further boost the immune system's ability to fight cancer.

What is the broker saying?

Bell Potter highlights that the speculative ASX stock is on the cusp of becoming a phase three company with a significant market opportunity. It notes:

At the end of CY24, IMM will transition into a Phase 3 company targeting one of the most lucrative oncology indications, first-line (1L) non-small cell lung cancer (NSCLC).

IMM will target all patients regardless of PD-L1 expression and test the regimen of Efti + pembrolizumab + chemo in ~750 patients. This is a positive choice in our view as it broadens the TAM to ~70k US patients diagnosed annually (or ~US$11b) and aims to improve upon the best standard of care currently available to patients, thereby speeding up Phase 3 recruitment and real-world adoption. Recruitment will start end-CY24/early-CY25.

The broker was also pleased to see that Immutep has successfully raised $100 million from investors recently. It believes this "improved balance sheet provides ~2.5 years of runway to end-CY26 (post Phase 3 futility analysis) and clears any perceived funding overhang in the near-term ahead of key readouts in HNSCC and beyond."

Big potential returns

Bell Potter has responded to the above by reaffirming its speculative buy rating and 80 cents price target on the ASX stock.

Based on its current share price of 41%, this implies potential upside of 95% for investors over the next 12 months. It concludes:

With longer-term value being driven by the 1L NSCLC Phase 3, short-term attention now shifts to the imminent release of Phase 2b data by 30th June in head & neck cancer, where Efti + Keytruda is being evaluated head-to-head against Keytruda.

We maintain our BUY (speculative) recommendation and $0.80/share valuation. We remain positive ahead of the significant Ph2b readout due in the next ~2 weeks.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Broker Notes

A young man pointing up looking amazed, indicating a surging share price movement for an ASX company
Broker Notes

These ASX shares could rise ~20% to 40%

Analysts believe these shares could generate big returns for investors.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

Two smiling work colleagues discuss an investment or business plan at their office.
Broker Notes

Which beaten down ASX 200 share did Goldman Sachs just upgrade to a buy rating?

The broker has become more bullish on this stock following last week's update.

Read more »

A young female investor sits in her home office looking at her ipad and smiling as she sees the QBE share price rising
Broker Notes

3 ASX shares brokers tip for significant outperformance in FY 2025

Leading brokers expect some significant outperformance from these three ASX shares.

Read more »

Broker looking at the share price on her laptop with green and red points in the background.
Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A group of businesspeople clapping.
Broker Notes

Guess which ASX 50 stock can rise 20%+ and offers a 5%+ dividend yield

Goldman Sachs is tipping this blue chip as a top buy.

Read more »

A woman frowns and crosses her arms.
Bank Shares

40% downside! Broker values CBA shares at $80 — is the fun over?

Valuations remain the top concern among brokers.

Read more »

Two brokers analysing stocks.
Broker Notes

Citi names these 3 ASX shares to buy now

Here are the latest upgrades from Citi.

Read more »