Wednesday 24 February 2021

GOVX and IMNM: The Next Two Major COVID Plays Are Moving Up

Last week we issued a bullish report on GeoVax Labs, Inc. (GOVX) and Immunome, Inc. (IMNM) called "GOVX and IMNM: The Next Two Major COVID Plays". This was in follow up to our bullish report on on Ocugen, Inc. (OCGN) on December 22 called "Why Ocugen Is Set To Soar Again Tomorrow" when it was trading at $0.81. OCGN has increased more than tenfold since. GVAX and IMNM dropped in price after the severe pullback on small cap and COVID stocks over the last few days, but rallied strongly on Wednesday, recapturing their momentum.  IMNM moved up particularly strongly, increasing 52% on only 1.1 million shares traded to close at $43.24. Based on its high volatility and low volume needed to move the stock, we think it can challenge its 52-week high of $63 made last week. GOVX rose 11% on 900,000 shares traded and remains one of the cheapest COVID vaccine stocks you can find with a $34 million market cap. We are up to 959 followers despite not giving out a lot of alerts, a fact that we think is indicative of a successful, diligent and prudent stock picking history. If you like our picks you can follow our blog by clicking the follow button on the top of the left hand panel as well as follow our Small Caps, Big Gains blog where we put up our Canadian picks. You can also follow us on Twitter @StockTradePicks which has over 4,900 followers.

Last month, GOVX was awarded a grant by the NIH to advance its COVID-19 vaccine development. What's important about GOVX's vaccine development is that it's focused on a one shot vaccine that is effective against multiple strains. From the press release:

GeoVax is leveraging its GV-MVA-VLP™ platform to address the global need for an effective and safe SARS-CoV-2 vaccine. Unique among other vaccines under development, the experimental GeoVax candidates are specifically designed to provide a broader and more long-lived level of protective immunity against SARS-CoV-2 while avoiding the potential side effects that can limit vaccine utility and acceptance. GeoVax’s vaccine candidates will be tested for antigen expression and genetic stability under conditions designed to simulate those in manufacturing, which will demonstrate the likely suitability of each vaccine construct as a candidate for full-scale production and clinical testing.

Mark Newman, Ph.D., GeoVax’s Chief Scientific Officer, commented, “The first generation of SARS-CoV-2 vaccines are based on the ‘Spike (S)’ protein and are designed to induce antibodies that block infection of human cells, an effect referred to as virus neutralization. The GV-MVA-VLP platform provides the opportunity to design and test vaccine candidates that differ significantly through the inclusion of multiple SARS-CoV-2 proteins that are presented to the immune system as virus-like particles (VLPs). Our goal is to safely increase vaccine potency and efficacy by inducing both neutralizing antibody and cellular immune responses to optimize the level of protection against existing and potential new variants of COVID as well as establish immunological memory to provide multi-year protection. Vaccines using the GV-MVA-VLP platform developed for other pathogens have proven to be efficacious with a single dose, having strong durability which would be a significant advantage for SARS-CoV-2 global vaccination campaigns.”

While it's still in the early stages, getting a grant not only reduces GOVX's cash burn rate while developing the vaccine, it also shows that it has good enough science to actually get a grant in the first place. The company recently closed a $10 million financing to secure a solid cash runway. 

What also makes GOVX so special compared to other early stage vaccine developers is that its market cap is ridiculously low. As of Wednesday's close of $5.65, its market cap is only $34 million, inclusive of the recent financing.  This compares very favorably to the other billion dollar companies out there that are also in the early stages of vaccine development. With so many vaccine plays running with or without news, it's only a matter of time before GOVX with its 6 million shares outstanding and 3.2 million float goes on its own major run. 

GOVX also has warrants under the symbol GOVXW. These warrants have a strike price of $5.00 and expire in September 2025, so there is plenty of time. We own the warrants because of the cheap leveraged upside. 

IMNM also has major potential after this excellent news released last week:

Immunome Discovers Antibodies Capable of Neutralizing Multiple SARS-CoV-2 Variants, Including the South African Variant, in Pseudovirus Testing

Immunome, Inc. (Nasdaq: IMNM), a biopharmaceutical company that utilizes its human memory B cell platform to discover and develop first-in-class antibody therapeutics, announced today that its discovery engine has isolated potent antibodies capable of neutralizing several SARS-CoV-2 variants, including the South African Variant (B.1.351), in pseudovirus testing.

This effort is part of the company’s ongoing program to develop a cocktail of antibodies targeting spike and non-spike proteins that can serve as a prophylaxis or a treatment for COVID-19. Immunome’s COVID-19 antibody research demonstrates that SARS-CoV-2 "super-responders" who recover from SARS-CoV-2 mount a robust immune response to a broad range of viral targets, including spike and non-spike proteins (https://www.biorxiv.org/content/10.1101/2021.01.27.428534v1).

As part of developing our antibody cocktail (IMM-BCP-001), Immunome has identified antibodies that bind to non-overlapping regions of the spike protein, including those regions containing the critical mutational variants. Immunome’s research shows that certain of our antibodies neutralize pseudoviruses expressing the spike protein of the South African Variant (B.1.351). Recent literature suggests that this South African Variant reduces the effectiveness of certain vaccines and antibody therapies (https://www.biorxiv.org/content/10.1101/2021.01.25.427948v1, https://www.biorxiv.org/content/10.1101/2021.01.25.428137v2).

Purnanand Sarma, PhD, CEO of Immunome, said, "Our findings underscore the power of Immunome’s discovery engine to quickly identify antibodies that are broadly effective against SARS-CoV-2 and its variants. Of note, Immunome’s discovery engine has identified antibodies that bind to conserved epitopes of SARS-CoV-1 and SARS-CoV-2 spike, as well as to other non-spike targets. We believe that our comprehensive strategy could combat the negative impact of escape mutants. We are encouraged by these results and plan to continue development efforts on these antibodies."

Jeffrey P Henderson, MD, PhD, Associate Professor of Medicine and of Molecular Microbiology at Washington University School of Medicine in St. Louis, and a member of Immunome’s COVID-19 Advisory Board, said, "Interrogating the overall immune responses in recovered COVID-19 patients allows Immunome to identify not only broadly neutralizing anti-spike antibodies but also promising non-spike antibodies that have the potential to enhance viral clearance. Broadly targeting multiple viral proteins in this way may provide alternative approaches to combat future SARS-CoV-2 variants."

In July 2020, Immunome was awarded a $13.3 million technology award from the U.S. Department of Defense's Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (JPEO-CBRND), in collaboration with the Defense Health Agency, to support Immunome’s COVID program. The research discussed in this press release and the article is part of that program.

IMNM's market cap is larger than GOVX's at $433 million based on Wednesday's closing price. But this kind of discovery is worth at least a billion dollars in our eyes. This is similar to the run that Sorrento Therapeutics, Inc. (SRNE) had last summer after claiming its antibody discovery was a "cure". SRNE is valued at over $3 billion right now. 

Both GOVX and IMNM are working on solving the COVID variant strain issue, and we expect more news to come from both of them that will lead to higher stock prices. 

Disclosure: We are long GOVXW, IMNM

What's next for microcap stocks? TradeMiner identifies seasonal trends and market cycles, the Penny Stock Prophet and Microcap Millionaires finds the next big small cap plays in various industries while Addicted to Profits makes trades from a Canadian perspective.

There are also some good books available on microcap stocks and day trading such as:

Mastering Microcaps: Strategies, Trends, and Stock Selection (Bloomberg Professional Library)

The Little Black Book of Microcap Investing: Beat the Market with NASDAQ/AMEX Microcap Stocks, OTCBB Penny Stocks, and Pink Sheet Stocks

Microcap Magic: Why The Biggest Returns Are In Stocks You've Never Heard Of

How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology

How to Day Trade: A Detailed Guide to Day Trading Strategies, Risk Management, and Trader Psychology

A Beginner's Guide to Day Trading Online (2nd edition)

Stock Investing for Beginners: Marijuana Stocks


Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:

The dividend stock report from dividendstocksonline.com

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