Imugene Limited Receives $4.13 Million R&D Tax Refund from Australian Government

Australian immuno-oncology company, Imugene Limited (ASX: IMU) is developing a pipeline of mimotope-based B-cell immunotherapies against oncology targets that could replace or be used in combination with monoclonal antibodies. The company intends to become the first biotech out of the gate with its B-cell immunotherapies in the immuno-oncology space.

Imugene has a strong product pipeline comprising numerous B-cell immunotherapies and an oncolytic virotherapy (CF33), subject to shareholder approval at the Extraordinary General Meeting, which is planned to be held on 18^th November 2019, targeted to treat tumours in combination with emerging immunotherapies and standard of care medications.

Imugene Receives R&D Tax Refund

In a significant achievement, Imugene has obtained $4.13 million worth R&D (research and development) tax refund under the Government’s R&D tax incentive program. Previously, the company also received an R&D tax refund of $1.85 million in November 2018 under the government’s R&D tax incentive program.

Imugene notified that this R&D tax incentive recognises the significance of immuno-oncology research activities conducted by the company during the financial year ended 30^th June 2019. The company spent an aggregate of about $7.6 million on R&D during FY19, out of which ~$4.8 million and ~$2.7 million were spent on HER-Vaxx and PD1-Vaxx, respectively.

During the 2019 financial year, Imugene made substantial progress in the development of its HER-Vaxx, undertaking the following activities:

• Monitored the enrolment and data collection for the HER-Vaxx Phase 1b/2 clinical trials.
• Completed the established HER-Vaxx Phase 1b gastric cancer study with all study endpoints met.
• Presented the Phase 1b study results at the American Association for Cancer Research (AACR) and the American Society of Clinical Oncology Annual Meetings.
• Initiated the Phase 2 HER-Vaxx study by dosing its first patient.

Imugene continued the development of its HER-Vaxx subsequent to FY19, presenting comprehensive results from HER-Vaxx Phase 1b clinical study at the European Society of Medical Oncology Congress 2019.

The company mentioned that the receipt of the current $4.13 million tax refund will further boost its commercial and clinical milestones.

About R&D Tax Incentive Program

The Australian government offers tax offset for eligible R&D initiatives under the R&D tax incentive scheme, encouraging firms to continue to carry out research and development promoting Australia. The Department of Industry, Innovation and Science and the Australian Taxation Office jointly administer the R&D tax incentive in the country.

The companies engaged in R&D may become eligible for:

• A 43.5 per cent refundable tax offset for eligible companies with less than $20 million per annum of aggregate turnover, given they are not regulated by income tax exempt entities.
• For all other eligible companies, a non-refundable tax offset of 38.5 per cent.

The R&D tax incentive intends to increase productivity and enhance competitiveness across the country’s economy by:

• Motivating the industry to carry out research and development that could not otherwise have been carried out.
• Boosting opportunities for smaller firms to conduct research and development.
• Providing less complex and more predictable support for businesses.

Imugene’s research and development activities are eligible under the Australian government tax incentive scheme for eligible expenditure. The company has further estimated an expenditure of $3.5 million on research and development activities for the December 2019 quarter.

Imugene holds a strong balance sheet , with $13.8 million cash balance as on 30^th September 2019, and is well-positioned to support its commercial and clinical targets. As it moves to HER-Vaxx Phase 2 clinical trial, it is likely to see an increased expenditure on R&D activities, that it believes will be managed effectively by its highly skilled and qualified management team.

Stock Performance: IMU traded at $0.024 on 6 November 2019 (2:31 PM AEST). The stock has generated a massive return of 120.16 per cent in the last five years, with a decent YTD return of 33.3%.

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