It’s a sad reality that 44% of Canadians will get cancer and 25% of Canadians are expected to die from it.
One of the main components of cancer treatment is immunotherapy. There are two types of immunotherapy: activation immunotherapy and suppression immunotherapy.
As the name suggests, activation immunotherapy triggers an immune response, whereas suppression immunotherapies reduce a response.
For cancer specifically, there are two ways to alter the immune system to fight back. This includes the stimulating the immune system to attack cancer cells and to give man-made immune system proteins to strengthen it.
This is where IMV (TSX:IMV)(NASDAQ:IMV) comes in. IMV is a clinical-stage bio-pharmaceutical company with a product that enables the controlled and prolonged exposure of antigens to boost the immune system. In layman’s terms, it’s a form of activation immunotherapy.
It’s a good investment due to its product’s ability to condition the immune system and its increasing revenues.
Conditioning the immune system
Before we dive into the importance of the immune system when it comes to cancer treatment, let’s focus on defining what an antigen is.
For the less biology inclined (my prior self included), antigens are substances that stimulate an immune response. Antigens are responsible for activating lymphocytes which are white-blood cells that fight infections.
The two types of antigens are foreign antigens and auto antigens. As the name suggests, foreign antigens originate from outside of the body such as those produced by viruses and from snake venom. Auto-antigens originate from within the body.
Antigens trigger the production of antibodies that are used to protect the immune system. Thus, through the exposure of antigens, patients are conditioned to produce more antibodies that attack harmful cancer cells. By conditioning the immune system, it can fight cancer cells more readily.
From an investors point of view, this is a very good reason to invest in the company as the methods and technology being used by IMV are very advanced. In the pharmaceutical industry, innovation is key, which means that a company like IMV is poised to deliver stellar returns for investors. The company’s flagship product is called DPX-Survivac and it’s getting a lot of publicity.
Due to the high costs of research and development, the success of a pharmaceutical company can’t be measured based on net income alone.
In fiscal 2018, IMV spent $13 million on research and development compared to $0.48 million in revenue. Despite this significant gap, I believe IMV is doing well as its revenues have increased from $0.13 million in fiscal 2015 to $0.48 million in fiscal 2018.
Growing revenues indicate that clients are interested in the products that IMV has to offer.
By focusing on the controlled exposure of antigens to the immune system, IMV plans to bring a product to the market that will revolutionize cancer treatments. Its product will help to condition a cancer patient’s immune system, ultimately rendering it more effective in fighting cancer cells.
Further, IMV’s revenue has increased from $0.13 million in fiscal 2015 to $0.48 million in fiscal 2018, which is testament to the interest around the company’s products.
Ultimately, investors looking to diversify with a pharmaceutical stock should look into buying IMV.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Chen Liu has no position in any of the stocks mentioned.