Shares of AC Immune ACIU have lost 18.3% in the past month compared with the industry’s decline of 1.3%. The stock has underperformed the sector and the S&P 500 Index during this timeframe.

Earlier in the month, ACIU reported better-than-expected results for the fourth quarter. Nonetheless, shares of this Switzerland-based clinical-stage biopharmaceutical company continue to slide down.

Let’s delve deeper and analyze the company’s strengths and weaknesses to understand how to play the stock in such a scenario.

ACIU Underperforms Industry, Sector and S&P 500 Index

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AC Immune’s Innovative Pipeline

AC Immune is utilizing its dual proprietary technology platforms, SupraAntigen and Morphomer, to develop drugs spanning multiple treatment modalities and targeting both established and emerging neurodegenerative pathologies. At present, ACIU is advancing therapeutic and diagnostic programs targeting five different types of misfolded pathological proteins related to Alzheimer’s disease (AD), Parkinson’s disease (PD) and other neurodegenerative disorders.

ACI-24.060 is AC Immune’s anti-Abeta active immunotherapy being evaluated in patients with AD and in subjects with Down Syndrome (DS). ACI24.060 is currently being tested at three different incremental doses in the phase Ib/II ABATE study (NCT05462106), and amyloid plaque reduction is being assessed using Abeta-PET imaging. The candidate has been granted Fast Track designation for the treatment of AD in the United States.

ACI-7104.056, an active immunotherapy targeting pathological a-syn, is currently being tested in the phase II study (VacSYn) in the EU and the UK.

ACI-35.030/JNJ-2056 is being evaluated in subjects with preclinical (i.e., pre-symptomatic) AD in the phase IIb study ReTain.
Apart from these, the pipeline includes P2620, a Tau-PET imaging agent discovered in collaboration with Life Molecular Imaging (late-stage clinical development in AD), ACI-15196 for PD (a phase I study will be initiated shortly), and others.

The market for neurodegenerative diseases like AD and PD is expected to grow significantly.

Collaborations Provide Funding to ACIU

ACIU has entered into strategic collaborations with pharma giants to advance its pipeline. In 2024, AC Immune entered into an exclusive option and license agreement with Takeda TAK for its active immunotherapies targeting Abeta, including ACI-24.060 for AD. AC Immune received an upfront payment of $100 million and is eligible to receive total potential payments of up to approximately $2.1 billion.

ACIU has collaborated with Janssen Pharmaceuticals, Inc., part of Johnson & Johnson JNJ, for ACI-35.030/JNJ-2056. In September 2024, the company received a milestone payment triggered by the rapid rate of prescreening in the potentially registrational phase IIb ReTain trial and the first patient was dosed in the second half of 2024. JNJ received Fast Track designation for JNJ-2056 from the FDA for AD in July 2024.

ACIU’s Cash Balance

ACIU owned cash resources of CHF 165.5 million as of Dec. 31, 2024. Management expects its cash balance to provide sufficient capital resources through the first quarter of 2027, assuming no other milestones are met.

ACIU Valuation and Estimates

Going by the price/sales ratio, ACIU’s shares are currently trading at a premium. The stock is currently trading at 6.15x forward sales, higher than its mean of 5.30x and the industry’s 1.70x.

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The loss per share estimate for 2025 has increased to 49 cents over the past 30 days.

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Stay Invested in ACIU

ACIU’s pipeline progress with key candidates is impressive. Potential positive data readouts on ACI-24.060 and ACI-7104.056 later in the year should boost investor sentiment. Collaboration with bigwigs like JNJ and Takeda provides funding to the company.

However, the targeted market of AD and PD is complex and obtaining approval for its candidates will be challenging. Any pipeline setback will adversely impact its growth prospects.

We advise prospective investors to wait for now before turning positive for ACIU. For investors already owning the stock, staying invested would be a prudent move.

ACIU currently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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