The Imugene Limited (ASX: IMU) share price has continued downward in the last 12 months, with the clinical-stage immuno-oncology company declining further in 2023.
Unlike the reasonable 3.5% return of the S&P/ASX All Ordinaries Index (ASX: XAO), shares in Imugene are now 35% lower than at the end of 2022.
The lacklustre performance has been dealt to shareholders despite a resurgence in some of the more speculative corners of the market this year.
Meanwhile, the company has been busy conducting trials for its various cancer treatments in recent months. Though, the market's response has been underwhelming for those already invested.
Would I buy Imugene shares at this price?
The clinical stage is incredibly challenging for an investor to gauge a company's intrinsic value. This stage of a biotech company's life is speculative at best. It often results in many years of research and considerable shareholder dilution to fund the studies.
However, when it pays, it can pay off big…
Telix Pharmaceuticals Ltd (ASX: TLX) is an ASX biotech stock demonstrating the rewards when a new drug or treatment is successfully commercialised. After failing to generate any meaningful revenue for many years, the launch of its Illuccix prostate cancer imaging injection led to $160 million in revenue in FY22.
The investment has borne fruit for its loyal shareholders, delivering a sensational 1,570% return since November 2017.
Imugene has several programs under evaluation, with its HER-Vaxx in the late stages of phase 2 trials.
The team is evidently making progress in assessing the potential of its immunology and oncolytic platforms. This isn't reflected in the Imugene share price though, possibly due to the lack of earnings in this high-interest rate environment.
The company has a solid cash balance, at roughly $162 million. Based on its current cash burn rate, it should be able to sustain itself for at least another few years.
Despite these positive traits, I would prefer to wait until Imugene has at least one money-making, commercialised product.
Investing in a company before it gets its first revenue source signed off can be exhilarating. However, it can also lead to years of underperformance and dilution if it doesn't pan out. That's why I'd rather miss out on the initial boom if it means a greatly reduced chance of losing money.
The ASX healthcare share I'd buy instead
If I were to invest in one ASX healthcare stock now, Clinuvel Pharmaceuticals Limited (ASX: CUV) would be on my list. The company already has a commercialised drug, Scenesse, which treats a rare but painful condition called erythropoietic protoporphyria (EPP).
Why I find Clinuvel more appealing than the Imugene share price currently boils down to three reasons:
- Clinuvel is already delivering high-margin earnings from a commercialised product
- Management is already looking at other areas of expansion for the use of Scenesse
- Additional products in the pipeline for future growth markets
Clinuvel's ability to fund itself as it investigates additional growth avenues plays an important role in de-risking the investment, in my opinion.
