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Tuesday, January 17, 2017

JPM Meeting Notes - Immune Pharmaceuticals (IMNP)

It’s hard to imagine a 21¢ stock with more going on than Immune Pharmaceuticals (IMNP)! The company is really trying in my opinion. There have clearly been past struggles, but I have no issues with the current strategy. That said, I see and hear confusion on the strategy. Immune has three distinct franchises, a pain franchise, an oncology franchise, and bertilimumab. It is difficult to secure funding when you are 21¢ and $30-35 million market cap with such a large pipeline; Immune has several assets beyond bertilimumab. So management’s strategy is to create subsidiaries that can be separately funded and eventually spun-off, with Immune holding ownership stakes in each. Maxim was the first spin-off and took with it all the pain assets, including AmiKet. Cytovia is up next, and will house Ceplene, Azixa, crolibulin, nanomabs, and the bi-specific platform with several drug candidates. It is not clear yet if the topical nano-cyclosporine program in psoriasis and atopic dermatitis will be funded through Immune or support a fourth subsidiary / spin off.

On Maxim – An initial $5 million funding with the potential to bring in an additional $10-15 million as the Phase 3 trial starts. The pre-money valuation was $15 million, so if Immune secures $15 million in total funding, shareholders will own 50% of Maxim and will be eligible for additional milestone and royalty payments. The management team led by Joe Pergolizzi, MD, seems impressive and according to management, additional assets are being considered for in-licensing. Maxim's goal is to become a leading pain specialty company and eventually come public.

On Cytovia – Management is out now looking to secure funding. We do not know the pre-money valuation of Cytovia, but with Ceplene, Azixa, crolibulin, nanomabs, and the bi-specific platform with several drug candidates, it could easily be $40-50 million. There are numerous additional transactions that investors will see with Cytovia over the next few months. This will be an interesting company to watch.

On Bertilimumab – The Phase 2 BP trial is enrolling – initially slowly because of the very restrictive inclusion criteria, but now accelerating after the first few patients. I know the CEO and the CMO are confident and because this is an open-label trial, data could really come at any time. I think we hear something in the second quarter 2017. The UC trial seems to be going well and I’m hoping we see data there around the middle of the year. A third program in severe atopic dermatitis (AD) is expected to start this fall. With bertilimumab, Immune is looking to compete with the impressive results of Regneron’s dipulumab in AD. A fourth program in NASH is anticipated with an oral formulation of bertilimumab. Last year, Immune filed a provisional patent on this candidate.

It also sounds like DGF is all out of the stock, so there is much less selling pressure and the company just recently secured up to $11 million through an ATM. The company has requested a hearing with NASDAQ following the non-compliance letter issued by NASDAQ. This is a several month process, so I do not expect a reverse split before Q2. This gives an opportunity for stock recovery if we see positive new and thus potentially a much smaller reverse split. Hopefully, better times are ahead of Immune shareholders.

Please see important information about BioNap and our relationship with companies mentioned above our Disclaimer.
BioNap holds no position in shares of IMNP.


  1. A few questions to BioNap. Would BioNap be so kind to answer those?

    "The management team led by Joe Pergolizzi, MD, seems impressive and according to management, additional assets are being considered for in-licensing"- quote from the article above by BioNap

    However, The last PR from Immune Pharma on Maxim/AmiKet was in October 2016.

    According to that PR Immune hired Dr Pergollizzi TO FORM Maxim Management team. According to the Immune/NPT September 2016 agreement to fund Maxim- hiring a new CEO was one of the conditions for Immune to get the first $5M tranche of funding from NPT investors.

    The above article by BioNap says that the Maxim management team "SEEMS IMPRESSIVE". So that must mean that the Maxim management team IS FORMED by this moment.

    Also Bionap firmly stated on Twitter on Dec 8th 2016 that the $5M tranche from NPT investors is received

    The questions are:
    1.Can Bionap confirm that the Maxim management team is formed by now, the new Maxim CEO is hired by now and Immune Pharma has received the first $5M tranche from NPT investors by now?
    2. If the first $5M tranche is paid by NPT investors who received it - Immune Pharma or Maxim? Logically thinking it must be Immune because Immune is the seller of a part of Maxim to NPT investors
    3. If everything (or at least something) included in the question 1 has happened by now - why do you think Immune Pharma has not provided up to this moment any PR on those events.

    Thank you

    1. Right now Dr. Pergolizzi is the "management team", so when I say that this "seems" impressive I am speak about him based on his resume and past endeavors. I do not know if he will become CEO or move to some other role, so it is hard to answer your question about the future leadership at Maxim. But, right now, they have engaged with someone who looks capable of getting things moving forward.

      The $5M goes to Maxim, not Immune. Read what I wrote above. IMNP gets ownership in Maxim. Maxim gets the cash. Immune gets no cash from Maxim or Cytovia.

    2. Thank you for the answers.

      Am I getting it right that Maxim has received by now the first $5M tranche from the NPT investors as you posted on Twitter?

      Thanks again

    3. I just asked management and post the response here. No response means they have not responded to my question (yet).

    4. OK but you answered a guy question about Maxim funding on Twitter on Dec 8th 2016 like this --- "They got the first $5M." So was it just your opinion at that time because you cannot confirm it here now without additional talks with the management?

      And if you can - please tell if you have meetings or phone talks with the IMNP management on a regular basis?


    5. The press release said it would close September 15th, so in mid-December when I was asked I just assumed it has closed. I've reached out to management to confirm but have yet to hear back.

    6. Spoke to IMNP management. They are finalizing the agreement with Maxim. He told me to look for an announcement in earl February.

    7. Thank you for the update

    8. Could you also please provide your opinion on the matter of money flow and holding structure of Maxim Pharma.

      According to the IMNP 8K SEC filing dated Sep15th 2016

      "On September 15, 2016, Immune Pharmaceuticals Inc. (the “Company”) entered into a binding agreement (the “Agreement”) with Novel Pain Therapeutics, LLC (“NPT”). Pursuant to the terms of the Agreement, NPT agreed that it, or subject to the Company’s approval, its designees (collectively, the “NPT Parties”), shall purchase up to $20,000,000 of the capital stock of the Company’s wholly-owned subsidiary Maxim Pharmaceuticals, Inc. (“Maxim”)" - quote from the SEC filing

      So on the date of the filing (and on the date of Immune entering into the agreement with NPT to fund Maxim) Maxim was a "wholly owned subsidiary" of Immune which means Immune owned 100% of Maxim.

      According to the agreement NPT investors will purchase up to $20M of Maxim capital stock. Also the option agreement that Immune/NPT signed in May 2016 indicates that after NPT pays their upfront payments --Immune will hold 33% of Maxim pharma.

      So we see that the amount of upfront payments agreed between Immune and NPT is $20M to be paid in multiple tranches first of which is $5M to be paid after fulfillment of a set of conditions (incl new CEO hiring).

      Given that Immune Pharma owned and probably still owns now 100% of Maxim Pharma (Maxim = a wholly owned subsidiary of Immune according to the above mentioned Immune SEC filing) and NPT investors shall purchase up to $20M of Maxim capital stock (according to the same SEC filing) -- that means that the only company NPT can purchase up to $20M of Maxim capital stock is Immune. So Immune is the seller, NPT is the buyer, $20M of Maxim capital stock is the object of the deal.

      With that NPT should pay the first $5M tranche and all the subsequent tranches to Immune in order to acquire capital stock of Maxim. And those tranches should be reflected in Immune financial reports as revenue.

      The question is - how will those tranches go to Maxim balance sheet from Immune balance sheet.

      Thank you

    9. NapCFAJanuary 20, 2017 at 12:09 PM
      Spoke to IMNP management. They are finalizing the agreement with Maxim. He told me to look for an announcement in earl February.

      Have there been any updates from the IMNP management on the Maxim progress? Last time according to your post they were indicating some news early February but it is the 3rd decade of March and still no news

      Thank you

  2. Hello,

    A question to Bionap..

    Since you claim that you have regular contacts with the Immune Pharma management, do you have any idea on the following:

    LinkedIn shows that Christine M. Winslow Ph.D after working at Actavis/Allergan for 8 years as a Director of Clinical Development changed her employer to Immune Pharmaceuticals from January 2017 and her profile shows she works at Immune as an Executive Director R&D Operations.

    But there has been no relevant PR from the company to this moment. Do you have any idea or can you ask the IMNP management why there has been no PR on that and if/when they are planning to officially announce Ms. Winslow appointment.


    1. She is working for IMNP, but the company said they didn't PR because they figured she isn't an officer (like CFO or CMO) so the news wasn't materially enough to PR. PRs are not free by the way.

      Thanks for reading,

    2. Thank you for the answer.

      But Immune could at least put something about it on their own site It would be free for sure for them.

      I dont know who is responsible for their site updates but sometimes they could be more informative to their shareholders.

      And they could correct some mistakes too. For example, in the Maxim/Amiket section of the site Epicept still mentioned but no info on the NPT binding agreement which was signed in September and there was a 8K SEC filing on that. So - info on the site does not always reflects info from their SEC filings.