Shares of Chinese biopharmaceutical company I-Mab (IMAB, Financial) continued to impress following the recent half-year results for the period ended June 30. The company added more than 27% in market value after posting impressive results. I-Mab has now gained more than 215% since listing on the Nasdaq in January.
The autoimmune disorders and cancer treatment research and development company is one of the companies to benefit from a highly successful initial public offering market this year. Other IPOs that enjoyed a stellar campaign this year include Schrodinger Inc. (SDGR, Financial), which gained more than 100% by mid-July before pulling back to a net gain of about 35%, and 1Life Healthcare Inc. (ONEM, Financial), which topped 88% in July before pulling back to a net gain of 32%.
However, I-Mab appears to have backed its successful start to life on Nasdaq with good results.
Recent results highlights
In I-Mab's most recent half-year results, which were posted before the opening bell on Monday, it reported net cash and cash equivalents of 1.6 billion yuan ($221 million), up from 400 million yuan booked as of Dec. 31, 2019.
I-Mab did not report any revenue for the six-month period. In the six months that ended in June 2019, it reported 15 million yuan. However, investors appear to have bought on the company's recent drug, lemzoparlimab (TJC4), which showed positive preliminary results in clinical trials.
The company announced on Aug. 17 that it had dosed its first patient with "plonmarlimab (also known as TJM2) in a Phase 1b study (CXSL1900100; NCT04457856) to evaluate its use in treating patients with rheumatoid arthritis (RA) in China."
These results formed a key part of its half-year results, which sparked the huge post-earnings rally. The company has invested more than $62 million in research and development, and some of that investment appears to be closer to yielding results.
Valuation
I-Mab is a development-stage company with no revenues to report in the six-month period since going public. Ideally, investors are betting on some of its clinical-stage products to pay off in the coming quarters, which can be as perilous at times as it can be rewarding.
Its enterprise value-to revenue ratio of about 55.22 for the trailing 12 months and a price-sales ratio of 416.35 is extremely high compared to Emergence BioSolutions Inc.'s (EBS, Financial) 5.39 and 5.01. Based on these numbers, I-Mab appears relatively overvalued, especially following Monday's rally.
Conclusion
In summary, cautious investors might want to wait for the company to start booking revenue again, or at least for the product pipeline to showcase more progress in the coming months. But more aggressive investors can move forward and seize the opportunity before the stock rises further.
Disclosure: No positions in the stocks mentioned.
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