'Obvious buying opportunity': Top broker says beaten-up ASX All Ords stock has 253% upside

Wilsons analysts say the market has misread top-line medical trial results released this week.

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ASX All Ords healthcare stock Immutep Ltd (ASX: IMM) is down by 26% over the past two days, and one market analyst reckons it's a golden buy-the-dip opportunity staring us right in the face.

Immutep shares are currently trading for 32 cents, down 5.97% on Friday. The stock plummeted 47% to an intraday 52-week low of 23 cents yesterday after the company released topline medical trial results.

Let's investigate.

Is this ASX All Ords healthcare stock a buy?

The TACTI-003 Phase IIb Trial is investigating the use of a combination therapy as a first-line treatment for head and neck cancer in 171 patients.

The combined therapy involves Immutep's MHC Class II agonist, eftilagimod alfa (efti), and anti-PD-1 therapy Keytruda (pembrolizumab).

Keytruda is a trademarked drug owned by Merck Sharp & Dohme LLC, a subsidiary of Merck & Co Inc.

In the first cohort of patients, the combined therapy led to a higher overall response rate compared to Keytruda therapy alone.

Results from the second cohort will follow next month, but management said they show an even higher overall response rate.

Sounds positive, so why did investors rush to sell the ASX All Ords healthcare stock?

As my colleague James explained in his coverage yesterday, the selling may have been driven by the absence of a p-value in the results.

The p-value is defined as the probability that the observed effect within the trial would have occurred by chance if there was no true effect.

Immutep has included p-values in study results in the past. So, investors may have wondered about their absence in the announcement.

What do the brokers say?

Wilsons reckons investors have made an error in judgement and punished the ASX All Ords stock unreasonably.

As reported in The Australian, Wilsons said:

The market has yet again misread Immutep and (this) should represent an obvious buying opportunity.

The broker added:

The market is also completely ignoring that Immutep have announced that data from Part B has substantially improved from early data release in April which already demonstrated more than five times vs. Keytruda monotherapy in this cohort.

Wilsons has an overweight rating on Immutep and a share price target of $1.13. This implies a potential 253% upside for this ASX All Ords healthcare stock over the next 12 months.

Bell Potter maintained its speculative buy rating on Immutep after the results were released.

The broker described the results as "a pleasing set of data and certainly supportive of further investment in clinical trials''.

Bell Potter reckons the ASX All Ords stock is worth 80 cents. So, it sees today's price level as a steal.

Immutep share price snapshot

The Immutep share price has risen 13.2% over the past 12 months.

This compares to an 8.85% gain for the S&P/ASX All Ords Index (ASX: XAO).

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Merck. 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.

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