Biotech Stock Mailbag: Immunomedics

The Biotech Stock Mailbag is back, starting with an email from Ken C., who asks, "Do you have any strong inclinations either way on Immunomedics(IMMU Quote)?"

Not really. Immunomedics has been pursuing development of a monoclonal antibody known as epratuzumab for blood-related cancers for a long time, with results that aren't particularly inspiring or differentiated from a host of similar drugs from competitors.

Another of the company's pipeline drugs, veltuzumab, hopes to compete directly against Roche's Rituxan -- a blockbuster blood cancer drug. That's a tall chore.

Immunomedics' partner UCB is studying epratuzumab in lupus, which has been a disease impervious to new drug development for 30 years.

At $3 and with an enterprise value under $200 million, Immunomedics isn't an expensive stock, and I guess you can make a viable argument that the stock is undervalued given the phase II and phase III status of its drugs. (This is the bull case made by the analyst at Brean Murray Carret. She has a buy and an $8 price target on the stock.)

I've been around biotech for a while, however, so I remember that Amgen(AMGN Quote) gave back development rights to epratuzumab in 2004, and since then, Immunomedics hasn't done much with the drug.

One more thing. Immunomedics' CEO Cynthia Sullivan is married to Chairman David Goldenberg. Who cares, you say? Well, one of my simple rules for biotech investing is to be wary of companies that employ family members, or where executives are married to each other.