Immuron’s Clinical Trial Faceplant: Bad News... But Not a Company Killer

Welcome to today’s edition of the Pulse Check, a 5-minute daily update on the ASX life-sciences sector.

On Tuesday I covered Immutep, yesterday I covered Imugene, and today I cover Immuron.

… the ‘im’ hat-trick.

Under the Microscope

Imagine spending two and a half years conducting a clinical trial that DOESN’T follow the ‘directions for use’ instructions on the back of the box.

That’s the explanation from Immuron (ASX:IMC | MC: $10M) as to why the results of its clinical trial yesterday didn’t meet the primary endpoint. (IMC)

The stock was down 35% on the news, on both the ASX and NASDAQ. 

Now, I wanted to work out whether this news was bad… really bad… or a true company killer.

To do that, I needed to work out what the expectations of the shareholders were going into the trial.

The higher the expectations, the harder the fall.

So to do this, I went back to the beginning and traced the stock to when it first started to sell its Travelan product in 2004.

So, what’s the story?

Immuron sells a product called Travelan for traveller’s diarrhoea.

It’s a popular product in Australia and you may have used it yourself if travelling to South East Asia.

Now, for a company’s main product to be sold for travellers' diarrhoea and still be around after the world shut down for COVID-19 is a monumental effort.

Product sales over the last 24-months had been tracking significantly up (highest levels in the company’s 20-year history type of thing).

The company secured a new licence to distribute and sell a second product in Australia for Irritable Bowel Syndrome.

Everything was on track in 2025.

However, the company had never been able to sell Travelan profitably.

Breaking into the US Market has always been a goal of Immuron for over 20 years, but it was never able to get there.

The reason for this was the product had never got registered as a pharmaceutical drug by the FDA, and it was only ever sold as a “dietary supplement”.

This meant that it was never recommended for travellers in either the CDC Yellow Book or International Society of Travel Medicine.

So the upside on US sales was always capped until the company could prove, in clinical trials, that its product was effective.

According to Immuron, an FDA approval unlocks potential US$100M in annual revenue:

So, expectations for this clinical trial were high.

IF Immuron was able to prove in a clinical trial that it could demonstrate its product prevented traveller’s diarrhoea, then it could seek FDA approval of its drug and unlock up to US$100 million in sales each year.

So, in 2020, the company announced that it would undertake a Phase 2 clinical trial with the Uniformed Services University, funded by the US Department of Defence. 

(The US Government had an interest in preventing stomach issues for troops deployed overseas).

The results of that trial were announced yesterday.

What happened with the trial?

The headline dotpoint was that the trial did not prove the primary endpoint.

This is never a good start.

BUT, if we dig a little deeper, we can see that there are some key things about the trial that didn’t match up with how Travelan is meant to be used.

Travelan is taken three times a day… under the trial it was taken twice a day.

Travelan is a pill… under the trial it was a powder to match the consistency of the placebo.

Travelan is manufactured by Immuron… under the trial it was manufactured by a third party.

So while the trial results were not good, the trial design was not good from the outset.

The big issue that Immuron will have now is the perception that the drug doesn’t work (particularly because it is being sold right now in Australia), when in reality all that this trial proves is that the drug doesn’t work under conditions that it wasn’t meant to be used.

So while the results may not have been a complete disaster, the implication of the results are not good for Immuron. 

The other thing working against Immuron is that the week before the clinical trial the company drew down $3.5 million in an At-The-Market facility.

(This gave me a chuckle when I read the explanation… “quick cash”)

Generally, companies that offer these facilities are not sticky holders.

45 million shares were issued to the company and only 21M shares were traded yesterday on the ASX. 

So I expect more selling to come for the debt provider to exit.

So, where does Immuron go from here? 

The company may need to do some damage control, to ensure that the results don’t immediately affect its ability to sell its products right now.

The company will next undertake a “End of Phase 2” meeting with the FDA and use this information on what NOT to do for a Phase 3 trial.

Growing sales within Australia appears to be a strength of the company right now, so I expect them to focus on that.

So was this news bad… really bad… or a company killer?

It’s not great, but if a company that sells tablets for traveller's diarrhoea can last with the world shut down for two years… they may just be able to survive anything.

See you all tomorrow,

The Armchair Analyst

Jason Segal

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The Daily Check-up

Since the start of the week US$3.2 billion in follow-on share offerings from eight US biotech companies have been announced. Marking one of the largest single week offerings in history for the industry. (Endpoints News)

🪑 Here are the deals that landed in the US this week.

• Structure Therapeutics - US$650M

• Terns Pharmaceuticals - US$650M (upsized from US$400M)

• Kymera Therapeutics - US$602M

• Wave Life Sciences - US$350M (upsized from US$250M)

• Dyne Therapeutics - US$350M

• Vera Therapeutics - US$261M (upsized from US$200M)

• Denali Therapeutics - US$200M

• Fulcrum Therapeutics - US$175M

Only a matter of time before this fever hits the Australian markets.

Emyria (AXS: EMD | MC: $35M) provided a broad update on its efforts to scale up its psychedelic-assisted therapy (MDMA/psilocybin) offering. More treatments, more patients, more therapists and more capacity. (EMD)

🪑 Disclosure, Emyria is my biggest personal stock holding. A nice pre-Christmas update indicating that everything is “on track” with regards to scaling up the psychedelic assisted-therapy offering… a big 2026 expected for Emyria.

An AI analysis of the Phase 2 data reported by Argentic Therapeutics (ASX:AGN | MC: $37M) back in September indicates that its treatment has the strongest effect in more severe stroke patients. This data will be used for its Phase 2b study design. (AGN)

🪑 Good study design is important to getting good results and evaluating where a company’s drug is most effective. (As you’ll see with my coverage of Immuron)

I think that over the next few years we will see more and more AI being used to guide clinical trial decisions.

Neurizon Therapeutics (ASX:NUZ | MC: $61M) has got the tick of approval from the FDA to proceed with its treatment in the HEALEY ALS Platform Trial - a trial evaluating multiple investigational drugs simultaneously for ALS. (NUZ)

Nanosonics (ASX:NAN | MC: $1.3B) secures certifications including ARTG mark in Australia and CE marks for the EU and UK, setting the stage to sell its infection prevention product to healthcare systems in these regions in January 2026.

🪑 Nanosonics CORIS product like an advanced dishwasher for medical equipment, but 1,000 times better.

CSL (ASX:CSL | MC: $87B) announces five-year results from its pivotal Phase 3 study confirming the durability and safety of its treatment in adults with haemophilia B. (PharmaTimes)

Terns Pharmaceuticals (NASDAQ: TERN | MC: US$4B) publishes data from a Phase 1 trial for chronic myeloid leukemia. (Biopharma Dive)

🪑Terns stock price has 5-bagged in the last two months off the back of early data from this trial and it continues to consolidate gains with more data published.

Novartis’ drug for the same indication was approved in 2021 and expected to hit $4B in annual sales this year.

M&A, Big Pharma Wants a Wife

Novartis has signed a deal with London-based Relation Therapeutics to discover new targets for immuno-dermatology conditions using AI. $55 million upfront, $1.7 billion in milestone payments. (Fierce Biotech)

Pfizer is making yet another play at a weight loss drug signing a deal with Chinese drugmaker YaoPharma for its obesity pill. $150 million upfront, $1.94 billion in milestones (Biopharma Dive)