Executive Summary / Key Takeaways

• Immutep is a pioneering biotechnology company at the forefront of Lymphocyte Activation Gene-3 (LAG-3) immunotherapy, developing novel treatments for cancer and autoimmune diseases. Its lead candidate, eftilagimod alfa (efti), a unique soluble LAG-3 protein, acts as an antigen-presenting cell (APC) activator to stimulate the immune system against cancer.
• Recent clinical trial results for efti are highly encouraging, with INSIGHT-003 demonstrating a 60.8% response rate in first-line non-small cell lung cancer (1L NSCLC) and TACTI-003 showing a median overall survival of 17.6 months in head and neck cancer, significantly exceeding historical controls. The EFTISARC-NEO trial also met its primary endpoint in soft tissue sarcoma.
• The company is advancing a pivotal Phase III trial (TACTI-004) in 1L NSCLC in collaboration with Merck (MRK)/MSD, with futility analysis expected by year-end 2025 and potential regulatory filing from 2026–27, marking a critical inflection point for commercialization.
• Immutep maintains a strong cash position of A$129.69 million as of June 30, 2025, providing an expected operational runway through the end of calendar year 2026, which is crucial for funding its extensive clinical pipeline.
• Despite being a development-stage company with increasing R&D expenses and current losses, analysts project substantial revenue growth, forecasting breakeven by 2028 and significant long-term upside potential, driven by its differentiated technology and strategic partnerships in a rapidly expanding immunotherapy market.

The Dawn of a New Immunotherapy Era: Immutep's LAG-3 Leadership

Immutep Limited, an Australian-based biotechnology firm, has evolved from its origins as Prima BioMed Ltd in 1987 into a clinical-stage leader in the burgeoning field of Lymphocyte Activation Gene-3 (LAG-3) immunotherapies. The company's journey has been marked by strategic acquisitions, notably the French immunotherapy company Immutep SA in late 2014, which cemented its focus on LAG-3. This pivotal move brought proprietary LAG-3 related intellectual property and a robust pipeline, fundamentally reshaping the company's trajectory and leading to its rebranding as Immutep Limited in November 2017. Today, Immutep stands as a global pioneer in understanding and advancing therapeutics related to LAG-3, a cell surface molecule vital in regulating T-cells.

The biotechnology sector, particularly immune-oncology, is experiencing a period of intense innovation and growth. Immune therapy is gaining significant traction within both the scientific and financial communities, driven by the promise of more effective and durable cancer treatments. Immutep's strategy is deeply embedded in this trend, aiming to address high unmet medical needs in cancer and autoimmune diseases by leveraging its unique LAG-3 platform. The company's operational footprint spans Australia, Europe, and the United States, supported by a network of clinical centers and manufacturing capabilities.

Unlocking Immune Potential: Immutep's Differentiated Technology

At the core of Immutep's investment thesis is its highly differentiated technology, centered on eftilagimod alfa (efti or IMP321), a soluble LAG-3Ig fusion protein. Unlike many LAG-3 antagonists that block the LAG-3 pathway, efti functions as an Antigen Presenting Cell (APC) activator. This unique mechanism involves efti binding to MHC class II molecules on immature dendritic cells, thereby inducing their maturation and activation. This process leads to the up-regulation of co-stimulatory molecules and the production of key cytokines like IL-12 and TNF-α, ultimately resulting in the expansion and proliferation of T-cells, including cytotoxic (CD8+) T cells. Essentially, efti "pushes the gas pedal" on the immune response, enabling the patient's immune system to more effectively recognize and attack cancerous cells.

The tangible benefits of this technology are becoming evident in clinical trials. In the INSIGHT-003 Phase I trial, a novel triple combination of efti with KEYTRUDA® (pembrolizumab) and chemotherapy in first-line non-small cell lung cancer (1L NSCLC) achieved a remarkable 60.8% response rate and a 90.2% disease control rate (N=51). Notably, in patients with PD-L1 Tumour Proportion Scores (TPS) below 50%, who represent a significant portion of the 1L NSCLC population and typically have fewer effective treatment options, this triple combination yielded a 59.6% response rate, substantially outperforming historical control rates of 40.8%.

Further demonstrating its versatility, the investigator-initiated EFTISARC-NEO Phase II trial, evaluating efti with radiotherapy plus KEYTRUDA® in resectable soft tissue sarcoma (STS), met its primary endpoint. The combination significantly exceeded the study's prespecified median of 35% tumor hyalinization/fibrosis, achieving a higher rate compared to 15% for historical data from radiotherapy alone. In head and neck cancer, the TACTI-003 Phase IIb trial showed a median overall survival of 17.6 months, which is more than double the typical 7-8 months observed with standard therapies. These results underscore efti's potential to enhance immune responses and improve patient outcomes across various difficult-to-treat cancers.

Beyond oncology, Immutep is also developing IMP761, a first-in-class LAG-3 agonist antibody for autoimmune diseases. Unlike efti, IMP761 aims to suppress, rather than stimulate, the immune response by silencing rogue T-cells responsible for autoimmune attacks. Early Phase I data for IMP761 has shown significant T-cell inhibition, demonstrating an 80% reduction, alongside a favorable safety profile. This dual approach to LAG-3 modulation positions Immutep to address a broad spectrum of immune-related disorders.

The company's robust patent portfolio, encompassing 13 patent families with seven specifically covering eftilagimod alfa, provides a strong competitive moat. These patents include methods of treating cancer with efti alone or in combination with other therapies, including chemotherapy and PD-1/PD-L1 inhibitors, and specifically cover triple combination therapies. This intellectual property safeguards Immutep's innovative approaches and underpins its long-term growth strategy.

Strategic Positioning in a Competitive Landscape

Immutep operates within a highly competitive biotechnology sector, vying with established pharmaceutical giants and other innovative biotechs. Key direct competitors include Merck, Bristol-Myers Squibb (BMY), AstraZeneca (AZN), Roche (RHHBY), and Gilead Sciences (GILD), many of whom also have LAG-3 assets in development, such as Bristol-Myers Squibb's relatlimab. However, Immutep's unique soluble LAG-3 protein mechanism differentiates it from the antibody-focused approaches prevalent among many rivals.

Immutep's strategy emphasizes demonstrating efti's efficacy in combination therapies, a critical approach in modern oncology. Its partnerships with major pharmaceutical players like Merck & Co./MSD, Merck KGaA (MKGAY), Novartis (NVS), EOC Pharma, and Laboratory Corporation of America Holdings (LH) (Labcorp) are integral to its business model. These collaborations not only provide financial backing and shared expertise but also validate Immutep's technology platform and offer potential pathways to commercialization and broader market access.

While larger competitors benefit from extensive global reach, diversified portfolios, and substantial R&D budgets, Immutep carves out its niche through specialized innovation and a focused pipeline. The company's ability to generate compelling clinical data, particularly in combination therapies, is crucial for its competitive standing. Its manufacturing platform, encompassing distribution capacity, logistics, software, and regulatory licenses, is viewed by management as a key value driver for future partnerships and pipeline expansion. This operational excellence in manufacturing, including the successful completion of comparability trials for CVac production, is a critical asset for a company developing complex biological therapies.

Financial Performance and Outlook

As a clinical-stage biotechnology company, Immutep's financial profile reflects significant investment in research and development, typical for its growth phase. For the full year ended June 30, 2025, the company reported revenue of AUD 10.33 million, an increase from AUD 7.84 million in the prior year. This revenue is primarily generated through strategic partnerships, licensing agreements, and R&D grants. However, the company also reported a net loss of AUD 61.43 million for FY2025, an increase from AUD 42.72 million in FY2024.

This expanded loss is largely attributable to a $19.9 million increase in R&D and intellectual property expenses, driven by escalating clinical trial costs.

Despite the current losses, Immutep maintains a robust liquidity position. As of June 30, 2025, the company held A$129.69 million in cash and cash equivalents, providing an expected operational runway through the end of calendar year 2026. This strong cash balance, partly bolstered by increased interest income of $5.3 million in FY2025 due to higher investments in term deposits, is critical for funding its extensive clinical development programs and enabling strategic decision-making without immediate dilution concerns.

Looking forward, the outlook for Immutep is characterized by significant clinical milestones and projected growth. The pivotal TACTI-004 Phase III trial in 1L NSCLC, a 750-patient study conducted across more than 25 countries in collaboration with Merck/MSD, is a major focus. A futility analysis for this trial is anticipated around year-end 2025, with potential regulatory filing from 2026–27. Additionally, interim analyses for the IMP761 autoimmune program are expected later this year and into early 2026. The company has also received positive feedback from the US FDA regarding the future clinical development of eftilagimod alfa, signaling a clear regulatory path ahead.

Analysts are bullish on Immutep's long-term potential, with price targets ranging from $7.00 to $12.00, suggesting substantial upside from its current trading levels. Forecasts indicate significant revenue growth, with annual revenue projected to reach $1,383 million by June 30, 2030, and the company is expected to achieve breakeven by 2028. This anticipated financial trajectory is underpinned by the successful advancement and potential commercialization of its LAG-3 immunotherapies.

Risks and Challenges

Investing in a clinical-stage biotechnology company like Immutep carries inherent risks. The primary risks include clinical trial failures, regulatory hurdles, and market adoption challenges. The success of its lead candidates, particularly efti, hinges on positive outcomes from ongoing and future clinical trials, which are inherently uncertain. Any delays or negative results could significantly impact the company's valuation and timeline to commercialization.

Financial risks include the company's continued high cash burn rate due to extensive R&D investments and the need for ongoing funding. While Immutep currently possesses a strong cash position, sustained losses necessitate careful financial management and potential future capital raises. Furthermore, cybersecurity threats pose a risk to critical preclinical and clinical trial data, potentially leading to operational interruptions, costly delays, and liabilities.

The competitive landscape is intense, with numerous established players and new entrants in the immunotherapy space. Immutep must continually demonstrate the superior efficacy and safety of its LAG-3 therapeutics to gain market share against well-resourced rivals. Dependence on strategic partnerships also introduces risks related to partner commitment, resource allocation, and potential changes in collaboration agreements.

Conclusion

Immutep Limited is strategically positioned at the forefront of LAG-3 immunotherapy, a rapidly expanding and critical area of modern medicine. Its proprietary soluble LAG-3 protein, eftilagimod alfa, represents a unique and potent mechanism for activating the immune system against cancer, with compelling clinical data emerging from multiple trials. The company's diversified pipeline, including promising autoimmune treatments, coupled with robust strategic partnerships, underpins a compelling long-term investment narrative.

While the journey of a development-stage biotech is fraught with clinical and financial risks, Immutep's strong cash reserves, clear regulatory feedback, and a pivotal Phase III trial on the horizon provide a solid foundation. The projected path to profitability by 2028 and significant revenue growth forecasts highlight the potential for transformative value creation. For investors with a long-term horizon and an appetite for the inherent volatility of the biotech sector, Immutep's innovative technological leadership and strategic execution in the LAG-3 space present a compelling opportunity to participate in the future of immunotherapy.