venBio Sends Letter to Immunomedics Stockholders

NEW YORK–(BUSINESS WIRE)– venBio Select Advisor LLC (“venBio”), the beneficial owner of
approximately 9.5 million shares, or 9.0%, of Immunomedics, Inc.
(NASDAQ:IMMU) (“Immunomedics” or the “Company”) and its largest
stockholder, today sent a letter to Immunomedics stockholders in
connection with venBio’s nomination of four highly-qualified candidates
– Scott Canute, Peter Barton Hutt, Dr. Khalid Islam, and Dr. Behzad
Aghazadeh – for election to the Company’s Board of Directors (the
“Board”) at the upcoming 2016 Annual Meeting of stockholders, which is
currently scheduled to be held on February 16, 2017.

The full text of the letter follows:

[January 11, 2017]

Dear Fellow Stockholders:

New York-based venBio Select Advisor LLC is the SEC registered
investment manager for venBio’s public markets strategy focused on the
biotechnology sector. Our fund aims to invest in disruptive innovative
assets, often through capital infusion into companies in order to
advance important novel therapies from development through
commercialization.

We believe that the Board of Directors and management of Immunomedics
have failed to advance the best interests of its stockholders.
In particular, we are extremely disappointed with the Company’s
failure to form a strategic partnership to bring to market IMMU-132, a
promising and much needed drug candidate for treating triple negative
breast cancer, which we believe may have led to a destruction of
stockholder value over the past year and a half. Furthermore, we believe
that poor corporate governance and a lack of
Board independence arising from the husband-wife team of
Board Chairman and Chief Scientific Officer (CSO) Dr. David Goldenberg
and CEO Cynthia Sullivan’s outsized presence on what was a five person
Board have contributed to a string of failures and missteps at the
Company, which are discussed below. We believe that the Company’s
recently announced Board and leadership changes are too little, too
late, and do not adequately address these concerns.

Over the past year and a half, we have engaged extensively with
Immunomedics, offering constructive solutions to improve the Company’s
shortcomings, unlock stockholder value, and advance the development of
the IMMU-132 drug. In our view, there has been a lack of significant
progress made to correct what ails the Company, which includes its
inability to move into Phase 3 testing of IMMU-132. We believe that the
flurry of recent press releases highlighting incremental news and, most
recently, the nomination of new director candidates, from Immunomedics
has been driven by defensiveness in the face of our public criticisms.
We urge stockholders not to fall for Immunomedics’ blatant attempt to
distract from the lack of true progress at the Company.

Clearly, change is needed urgently to right the
course of Immunomedics. This is why we are nominating four
highly-qualified candidates for election to the Board. Our candidates
have the necessary pharmaceutical development
background and breast cancer expertise, commercial manufacturing and
regulatory expertise, management skills, pharmaceutical partnering/deal
making and capital markets know-how to successfully
lead the Company forward and drive the advancement of the IMMU-132 drug,
which will enhance stockholder value and restore stockholder confidence.

Our case for change at venBio is based on the following core arguments:

1) The Board has Overseen Rampant Destruction
of Stockholder Value

• The Company received breakthrough designation (BTD) from the FDA on
  February 5, 2016, a recognition by the regulatory agency of the
  potential promise the drug candidate IMMU-132 holds.
• However, the Company was then ejected from
  the prestigious American Society of Clinical Oncology (“ASCO”) for
  breaking the conference’s data embargo, The ASCO conference
  organizers determined that Immunomedics “violated the [ASCO] embargo
  by reporting results…[previously] at a conference in April [2016].”
  ¹ Immunomedics’ stock price declined a staggering 60% in the
  three weeks following the event. Meanwhile, Dr. Goldenberg and Ms.
  Sullivan sold 750,000 shares of the Company on the open market during
  this time.
• Despite the substantial clinical progress and regulatory clarity
  providing for a possible accelerated path to approval by the Food and
  Drug Administration (“FDA”), the Board and
  management have overseen a 30% share price decline, from $3.95 on June
  1, 2015 (the day the initial data were presented at the 2015 ASCO
  conference) to $2.77 on November 15, 2016 (the closing price prior to
  our announcement of our nominations), while the NASDAQ Composite index
  gained almost 4% over the same period.
• In fact, Immunomedics’ share price has, over the past three years, consistently
  lagged the biotech indices as well as the broader NASDAQ Composite
  index.

2) Immunomedics Has Failed to Form a Strategic
Partnership to Bring the IMMU-132 Drug to Market and Monetize its
Pipeline

The Company has failed to deliver on its promise
of signing a partnership or licensing agreement to move IMMU-132,
a drug candidate for treating triple negative breast cancer (a deadly
disease for which no targeted therapies currently exist), through
clinical development. This has prohibited the necessary clinical trials
that would allow patients to benefit from this treatment.

• The Company has noted repeatedly that its goal is to partner IMMU-132
  with a global pharmaceutical company to help expedite clinical
  advancement as well as defray the costs of running an expensive
  registration clinical trial.
• Despite explicitly noting on the FY4Q16 earnings call on August 17
  that “[Immunomedics] already ha[d] term sheets,” the Company has
  failed to enter into a partnership to date.
• Recent attempts to create the illusion of progress are nothing more
  than a smokescreen. What the Company portrays as steps forward are in
  reality too little, too late, and are what most public companies would
  deem unworthy of playing up to such a high degree.
• Without a partnership with a global pharmaceutical company, the
  Company will be unable to complete a Phase 3 global registration
  trial, effectively turning their failure to close a deal into a
  perpetual delay in advancing their drug candidate and an unnecessary
  impediment to providing this important therapy to the un-served
  patient population.
• On the Company’s FY1Q17 earnings call, Company representatives
  indicated that they plan on treating patients at the “beginning of
  next year” and as late as March 2017, several months later than the
  late 2016 initiation originally discussed on the FY4Q16 earnings call.
• The delay in moving to Phase 3 will make submission of an accelerated
  FDA approval filing more difficult as the FDA requires a confirmatory
  Phase 3 trial to be substantially underway at the time of filing.
• The Company has put patient access to the
  drug at risk because of mismanagement of the partnership and
  clinical trials process.

3) The Company Has Failed to Maintain Good
Corporate Governance

The Company’s husband-wife CEO-CSO team until recently occupied 40% of
its Board seats and the Chairmanship of the Board, severely limiting the
ability of the Board to exercise independent oversight over management.
Although this is slated to change per the Company’s recent announcement,
their hasty maneuvers to adjust the Board are, in our view, simply a
calculated minimal response to our criticisms, and not reflective of any
newfound devotion to good corporate governance. The Board’s failure to
implement any necessary changes prior to our criticism demonstrates its
inability to confront the challenges faced by the Company.

Even though Dr. Goldenberg owns a larger stake in the Company’s
subsidiaries than in the Company itself, the Board apparently finds it
acceptable to allow Dr. Goldenberg to allocate ownership of new
intellectual property between the Company and its subsidiaries that he
owns.

We believe that Dr. Goldenberg and Ms. Sullivan, as members of both
management and the Board, bear responsibility for the Company’s
strategic missteps that have led to a significant decline stockholder
value. In addition, we believe the misaligned compensation structures
that have been put in place for Dr. Goldenberg and Ms. Sullivan have led
to the enrichment of both executives without a corresponding increase in
stockholder value:

• Dr. Goldenberg has leveraged his invention of IMMU-132 to personally
  derive product royalties for sales completed if the Company achieves
  profitability.²
• Dr. Goldenberg receives $150,000 of incentive compensation every year
  the Company fails to generate a profit.
• Dr. Goldenberg was paid $4.2M in FY2016, including $3.4M of stock
  awards, while the Company’s share price declined 41%.³
• Ms. Sullivan was paid $1.4M during the same period, including $350K in
  stock awards despite a failure to achieve any of the Company’s stated
  goals. ⁴

Management missteps along with concerning behavior throughout this
contested proxy process leave us concerned about management’s ability to
act in the best interests of stockholders.

In addition, the Company has repeatedly misled investors and mismanaged
its cash balance.

• Throughout FY2016, the Company repeatedly refused to take investments
  in IMMU-132 as they reassured investors that their potential
  partnership would provide sufficient cash to continue operations.
• On October 5, 2016, the Company issued a dilutive financing of
  $30,000,000 with 100% warrant coverage, while the stock was at its
  then lowest levels since ASCO 2016.
• More than the financing itself, the loss of credibility from
  originally telling investors that the Company was not going to engage
  in dilutive financing was devastating to the share price, leading to a
  24% share price decline in a single day while the NASDAQ Composite was
  up 0.5%.

4) venBio’s Highly-Qualified Board Nominees
have the Requisite Experience and Skill Set Needed to Transform
Immunomedics; The Company’s Nominees Do Not

We have for years observed Immunomedics and analyzed its deficiencies.
Based on this, we believe that the following core competencies and areas
of expertise are essential qualities that any potential Board must
collectively possess if Immunomedics is to embark on the path of
creating true stockholder value:

• Pharmaceutical Development Background and Breast Cancer Expertise
• Commercial Manufacturing Expertise
• Regulatory Expertise
• Good Management Skills and Corporate Governance Know-How
• Pharmaceutical Partnering/Deal Making Experience
• Capital Markets Expertise

While we are still evaluating Immunomedics’ recent additions to the
Board, our initial impression is that their candidates do not fulfill
the requirements above because collectively they do not have the
comprehensive experience in these areas. The focus of the Company’s
major asset pertains to a complex therapeutic treatment with breast
cancer, an area where venBio’s nominees are better positioned to oversee
based on our experience and knowledge.

Additionally, we are concerned with the Company nominees’ lack of
relevant experience in signing a strategic partnership with a large
pharmaceutical company, which is a main corporate objective of the
Company to advance the progress of IMMU-132. It’s critical that the
Company is ideally represented to execute on the most valuable strategic
relationship, as well as be appropriately positioned for the period
thereafter, ensuring continued success of the Company. The Company will
not have a second chance to put in the right Board and leadership.

venBio’s nominees were brought together with
thought to address the current and future needs of the Company in
comparison to the Company’s slate which we believe was patched together
in an attempt to quickly and ineffectively react to the pressure we have
placed on the Company. We believe that our slate of
highly-qualified candidates possess each of the essential qualities we
listed above and collectively fit these needs, which will provide the
change necessary to accelerate the advancement of drug candidates,
namely IMMU-132, that address unmet medical needs and to unlock value
for our fellow stockholders, guiding the Company through a critical time
of growth, and restoring the investment community’s confidence in the
Immunomedics Board.

In addition, venBio has a strong advisory network that our nominees will
use as a resource if they join the Board. This network includes Dr.
Richard Heyman, co-founder and Chief Executive Officer of Aragon
Pharmaceuticals, which focused on androgen receptor signaling inhibitors
for the treatment of prostate cancer and was acquired by Johnson &
Johnson in 2013, and Seragon Pharmaceuticals, which focused on Selective
Estrogen Receptor Degraders (SERDs) for the treatment of breast cancer.
venBio’s nominees for the Immunomedics Board of Directors include:

• Scott Canute – Canute has more than 34 years of experience in
  the biopharmaceutical industry, having served as President, Global
  Manufacturing and Corporate Operations at Genzyme Corporation and
  previously as President of Global Manufacturing Operations at Eli
  Lilly and Company. He holds a B.S. in chemical engineering from the
  University of Michigan and an M.B.A. from Harvard Business School. Mr.
  Canute’s specific expertise in the area of commercial biologics
  manufacturing and CMC as well as his extensive Board experience with
  multiple pharmaceutical companies, make him well qualified to serve on
  the Board of Immunomedics, in our view.
• Peter Barton Hutt – Hutt is a renowned expert in food and drug
  law and currently serves as Senior Counsel at Covington & Burling LLP.
  He began his law practice with the firm in 1960 and has remained at
  the firm with the exception of serving as Chief Counsel for the Food
  and Drug Administration from 1971 until 1975. He has been recognized
  by The Washingtonian magazine as one of Washington’s 50 best lawyers
  and one of the 40 best health care lawyers in the U.S. by the National
  Law Journal. He holds a B.A. from Yale University, an LL.B. from
  Harvard Law School, and an LL.M. from the New York University School
  of Law. We believe that Mr. Hutt’s expertise in the US and EU
  regulatory frameworks including successful interactions with both the
  FDA and the EMA as well as his service on a wide range of Boards of
  Directors in the biotechnology and pharmaceutical industries, make him
  very well qualified for the Board of Immunomedics.
• Dr. Khalid Islam – Dr. Islam has over 29 years of experience in
  the pharmaceutical and biotechnology industry and currently serves as
  the Managing Director of Life Sciences Management GmbH. He also
  co-founded Sirius Healthcare Partners, a Swiss life sciences company,
  and PrevABR LLC, an American clinical-stage therapeutics company. Dr.
  Islam also previously served as Chairman and CEO of Gentium S.p.A., a
  Nasdaq-listed pharmaceutical company. Dr. Islam graduated from Chelsea
  College and received his PhD from Imperial College, University of
  London. In our view, Dr. Islam’s extraordinary board experience,
  deep knowledge of business development and collaboration, and
  outstanding leadership position him well to be a Board member at
  Immunomedics.
• Dr. Behzad Aghazadeh – Dr. Aghazadeh is a managing Partner and
  Portfolio Manager of the venBio Select Fund. He brings more than 20
  years of experience in the biopharmaceutical industry, including more
  than 10 years as an institutional investor and previously six years at
  Booz Allen as a general management consultant to senior executive
  teams of the healthcare sector. Dr. Aghazadeh holds a Master’s in
  Physics from the Ludwig-Maximilians-University (Munich, Germany) and a
  PhD in Biochemistry & Biophysics from Cornell University. We
  believe that Dr. Aghazadeh’s extensive experience working on strategic
  initiatives for executive management teams and boards of directors of
  numerous companies in the biopharmaceutical industry, as well as his
  considerable experience as an investor in emerging companies in the
  sector, make him well qualified to serve as a director of Immunomedics.

At this critical juncture in the acceleration
of IMMU-32, your vote is critical to curbing the tide of missteps and
strategic failures at Immunomedics. We
urge you to support our four highly-qualified Board nominees, who have
the skills and experience necessary to turn around the Company and build
lasting value for you, its stockholders.

Vote FOR all four of our Nominees on the GOLD
Proxy Card Today.

Sincerely,

Dr. Behzad Aghazadeh

About venBio Select Advisor LLC

venBio Select Advisor LLC (“venBio Select”) is the SEC registered
investment manager for venBio’s public markets strategy and its main
equity investment vehicle – the venBio Select Fund – which primarily
invests across the biotechnology and therapeutics sector. The venBio
Select Fund is managed by Dr. Behzad Aghazadeh, supported by a team of
seasoned professionals with advanced medical and scientific backgrounds,
and extensive investment experience in the biopharmaceutical industry.
The investment and business operations for venBio Select are based in
New York. venBio’s separate venture capital team operates and manages
their funds from San Francisco, partnering with industry leaders to
build biotechnology companies with a focus on novel therapeutics for
unmet medical needs.

About the Proxy Solicitation

venBio Select Advisor LLC, Behzad Aghazadeh, Scott Canute, Peter Barton
Hutt and Khalid Islam (collectively, the “Participants”) have filed with
the Securities and Exchange Commission (the “SEC”) a definitive proxy
statement and accompanying form of proxy to be used in connection with
the solicitation of proxies from the stockholders of Immunomedics (the
“Company”). All stockholders of the Company are advised to read the
definitive proxy statement and other documents related to the
solicitation of proxies by the Participants, as they contain important
information, including additional information related to the
Participants. The definitive proxy statement and an accompanying proxy
card is being furnished to some or all of the Company’s stockholders and
is, along with other relevant documents, available at no charge on the
SEC website at http://www.sec.gov/
or from Okapi Partners at 212-297-0720 or info@okapipartners.com.

Information about the Participants and a description of their direct or
indirect interests by security holdings is contained in the definitive
proxy statement on Schedule 14A filed by the Participants with the SEC
on December 6, 2016. This document is available free of charge from the
sources indicated above.

Warning Regarding Forward Looking Statements

THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS. FORWARD LOOKING
STATEMENTS CAN BE IDENTIFIED BY USE OF WORDS SUCH AS « OUTLOOK »,
« BELIEVE », « INTEND », « EXPECT », « POTENTIAL », « WILL », « MAY », « SHOULD »,
« ESTIMATE », « ANTICIPATE », AND DERIVATIVES OR NEGATIVES OF SUCH WORDS OR
SIMILAR WORDS. FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE ARE
BASED UPON PRESENT BELIEFS OR EXPECTATIONS. HOWEVER, FORWARD LOOKING
STATEMENTS AND THEIR IMPLICATIONS ARE NOT GUARANTEED TO OCCUR AND MAY
NOT OCCUR AS A RESULT OF VARIOUS RISKS, REASONS AND UNCERTAINTIES.
EXCEPT AS REQUIRED BY LAW, VENBIO AND ITS AFFILIATES AND RELATED PERSONS
UNDERTAKE NO OBLIGATION TO UPDATE ANY FORWARD LOOKING STATEMENT, WHETHER
AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS

¹ Press Release: Immunomedics Provides Update on
Triple-Negative Breast Cancer Presentation at ASCO (Jun. 3, 2016), available
at https://globenewswire.com/news-release/2016/06/03/845992/0/en/Immunomedics-Provides-Update-on-Triple-Negative-Breast-Cancer-Presentation-at-ASCO.html.
See also Adam Feurstein, Immunomedics Kicked Out of
Prestigious ASCO Cancer Conference, THE STREET (Jun. 3, 2016),
available at https://www.thestreet.com/story/13594991/1/immunomedics-kicked-out-of-prestigious-asco-cancer-conference.html.

² See the Company’s proxy statement for the 2016
annual meeting of stockholders, filed with the SEC on November 2, 2016,
at 50-51.

³ Id. at 44.

⁴ Id.

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