If you have a high tolerance for risk, then Bell Potter thinks it could be worth considering the ASX biotech stock in this article.
In fact, if everything goes to plan, the broker believes this speculative stock could more than double in value over the next 12 months.
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Which ASX biotech stock?
The stock in question is Imugene Ltd (ASX: IMU). It is a drug developer specialising in the development of new agents for various cancer indications.
Bell Potter notes that the company has a history of in-licensing early-stage assets, typically pre-clinical or with phase 1 data, and progressing their development.
Consequently, it points out that the risk of failure is probably high, however "the future financial benefit from development of a new chemical entity for the treatment of disease are immense."
Bell Potter has been speaking to a leading haematological oncologist in relation to the ASX biotech stock's Azer-cel product. The good news is that the oncologist has spoken positively about its potential. The broker explains:
Our recent discussion with a leading Haematological Oncologist regarding IMU's Azer-cel has provided significant assurance regarding its potential in the treatment landscape for both common and rare forms of Non Hodgkins Lymphoma (NHL).
The broker also highlights that recent trial data has been encouraging. It adds:
The CAR-T naïve patient group continues to enrol and early signs of efficacy are highly encouraging. Hi[gh] risk Mantle Cell Lymphoma patients typically fail quickly on first and second line therapies including BTKi. These patients are particularly well suited to Azer-cel where healthier donor T-cells provide potentially superior in vivo expansion versus patient-derived cells in this setting. The company continues to enrol patients in this cohort where the off the shelf solution remains a major attraction of oncologists who otherwise have few treatment options.
Big potential returns
According to the note, the broker has retained its speculative buy rating and 25 cents price target on the ASX biotech stock.
Based on its current share price of 9.3 cents, this implies potential upside of almost 170%.
Commenting on its recommendation, Bell Potter said:
Azer-cel remains an outstanding alternative for the treatment of NHL. The next catalyst is the median DoR data in the DLBCL population (n=17) and further interim data from the CAR-T naïve group and BTKi concurrent combination. Valuation and earnings are unchanged.
