Immunomedics Inc fka IMMU

[Roland Rick Perry]

Food Fight

We added Immunomedics (NASDAQ:IMMU) $3.40 to the watch list on September 15th @ $3.00 for reasons unrelated (but not totally unexpected) to today's news, that the venerable venBio has launched a nasty food fight against husband and wife management team David Goldenberg and Cynthia Sullivan (the CSO and CEO) who are also holders of nearly half the board seats.

As for a mini-background on venBio, they noted in a press release related to closing of a $315 million round for Fund II (whose investors included Amgen, Baxalta and Merck) that the two venBio strategic funds have invested in 14 companies to date, including: Cytos (now KURN), Aragon (acquired by J&J), Solstice, Labrys (acquired by Teva), Seragon (acquired by Roche/Genentech), Aurinia (NASDAQ:AUPH), Heart Metabolics, Metacrine, Alexo, Precision Biosciences, Checkmate, Adheren, Apellis, and Nabriva (NASDAQ:NBRV)...these guys are good. Really good.

venBio, which owns 9.5 million shares of Immunomedics or 9%, stated in a press release today that missteps by the couple has torpedoed the Company's valuation and left them with no choice, but to take action - in order to protect the best long-term interests of both stockholders (including their $30 million stake) and patients in desperate need of IMMU-132 treatment and of course, their track own record.

Our original thesis - as simply as we can put it and recall - was that:

A) the shares were down due to non-fundamental reason (see original write-up), as

B) it continues to release encouraging news with regards to unlocking the potential of IMMU-132 (which we call SacGovite), the Company's drug candidate for deadly and near impossible to treat triple negative breast cancer and

C) a potential short-squeeze from a large short position of 19,372,632 shares, down from 22,840,120 shares short the day we added it to the watch list.

When we combined those three factors, put them in a Martini shaker and shook real hard, what poured out was a $12 price target. While we are not raising the price target, we now think this Martini will go down much faster than we originally anticipated.

Read about the food-fight here:

http://seekingalpha.com/instablog/295897-roland-rick-perry/4936021-immunomedics-immu-food-fight