ImmunoGen, Inc. (NASDAQ: IMGN) is a clinical-stage biotechnology company that develops targeted cancer therapeutics using its antibody-drug conjugate (ADC) technology. The Company is engaged in the discovery of monoclonal antibody-based anticancer therapeutics. An ADC with the Company’s technology comprises an antibody that binds to a target found on tumor cells conjugated to one of its anti-cancer agents as a payload to kill the tumor cell once the ADC has bound to its target.
Shares of ImmunoGen have surged have more than 200% year to date, the rally is driven by strengthening of its balance sheet through deal collaborations as well as initial signs of activity for an early-stage clinical candidate.
From a business risk profile perspective, ImmunoGen, made substantial progress during the second quarter towards its strategic priorities, generating compelling data with its lead program and advancing novel pipeline.
As per management, IMGN reported single-agent and combination therapy data with mirvetuximab soravtansine in over 150 patients at ASCO, which strengthens its confidence in the potential of mirvetuximab in the FORWARD I patient population as it moves into earlier lines of treatment for ovarian cancer. Additionally, IMGN presented encouraging initial clinical results for IMGN779 in AML, demonstrating dose-dependent biological and anti-leukemia activity, and the ability to retreat patients.
So far liquidity and financial flexibility is concerned, the company significantly improved its cash position through transactions with Sanofi and Debiopharm, enabling it to increase focus on the development of mirvetuximab and IGN programs. Also, ImmunoGen is likely to do more cash-generating deals with its pipeline drugs, because its current stockpile will only fund operations into the second half of 2018.
The near-term catalysts for the company involve timely execution on these programs, including filing the IND for IMGN632, its novel CD123-targeting ADC for hematological malignancies. Furthermore, the Company expects to present updated clinical data for IMGN779 in patients with relapsed or refractory adult AML at an upcoming medical meeting.
During the 2nd quarter of 2017, IMGN reported a cash balance of $150.1 million. It also had $100 million of convertible debt outstanding. Net loss for the quarter amounted to $8.9 million, and management is guiding for cash on hand to fund operations into the second half of 2018.
Analysts Opinion
As of Aug 11, 2017, the consensus forecast amongst investment analysts covering ImmunoGen, Inc. advises that the company will outperform the market. The 6 analysts offering 12-month price targets for ImmunoGen, Inc. have a median target of 8.50, with a high estimate of 12.00 and a low estimate of 3.00.
About the company:
ImmunoGen is a clinical-stage biotechnology company that develops targeted cancer therapeutics using its proprietary antibody-drug conjugate (ADC) technology. ImmunoGen’s lead product candidate, mirvetuximab soravtansine, is in a Phase 3 trial for FRα-positive platinum-resistant ovarian cancer, and is in Phase 1b/2 testing in combination regimens for earlier-stage disease. ImmunoGen’s ADC technology is used in Roche’s marketed product, Kadcyla®, in other clinical-stage ImmunoGen product candidates, and in programs in development by Amgen, Bayer, Biotest, CytomX, Debiopharm, Lilly, Novartis, Sanofi, and Takeda.
Product pipeline:
Recent developments of Proprietary Portfolio:
Presented pooled analyses of three Phase 1 expansion cohorts at the American Society of Clinical Oncology (ASCO) Annual Meeting, demonstrating the safety and efficacy profile of mirvetuximab soravtansine in the patient population being enrolled in FORWARD I, the ongoing Phase 3 registration trial in women with folate receptor alpha (FRα)-positive ovarian cancer;
Presented encouraging data from the Phase 1b/2 FORWARD II study at ASCO, evaluating mirvetuximab soravtansine, demonstrating its potential to complement currently available therapies for FRα-positive ovarian cancer in a range of treatment settings, including earlier lines of therapy; and
Presented first-in-human data at the 22nd Congress of the European Hematology Association (EHA) on IMGN779 in patients with relapsed or refractory adult acute myeloid leukemia (AML), whose tumors express CD33, demonstrating safety and tolerability across seven dose levels, with no dose limiting toxicities, as well as evidence of dose-dependent biological and anti-leukemia activity.
Recent developments on partnered Programs:
In exchange for a $30 million payment, ImmunoGen granted Sanofi-Aventis U.S. LLC (Sanofi) a fully-paid, exclusive license to develop, manufacture, and commercialize the certain experimental agents in development.
In exchange for a $25 million upfront payment, Debiopharm International, S.A. (Debiopharm) acquired the Company’s IMGN529/DEBIO 1562, a clinical-stage anti-CD37 ADC for the treatment of patients with B-cell malignancies, such as non-Hodgkin lymphoma. ImmunoGen will receive a $5 million milestone payment upon completion of the transfer of technologies related to the asset, which is expected before year end, and is also eligible for a second success-based milestone payment of $25 million upon IMGN529/DEBIO 1562 entering a Phase 3 clinical trial;
CytomX announced the treatment of the first patient in a Phase 1/2 clinical trial evaluating CX-2009, a ProbodyTM drug conjugate, as monotherapy in select advanced solid tumors, resulting in a $1 million milestone payment to ImmunoGen; and
Bayer announced that the Phase 2 trial assessing anetumab ravtansine in patients with recurrent malignant pleural mesothelioma did not meet its primary endpoint of progression-free survival. The safety and tolerability of anetumab ravtansine were consistent with earlier clinical findings and Bayer is continuing development in additional studies, including a Phase 1b multi-indication study in six different types of advanced solid tumors, and a Phase 1b combination-study in patients with recurrent platinum-resistant ovarian cancer.
Upcoming Events/near term catalysts:
- ImmunoGen anticipates filing an investigational new drug (IND) application in the third quarter of 2017 to support clinical testing with IMGN632, a CD123-targeting ADC integrating a more potent DNA-alkylating payload intended to treat a range of hematological malignancies.
- The Company expects to present updated clinical data for IMGN779 in patients with relapsed or refractory adult AML at an upcoming medical meeting.
- ImmunoGen plans to publish results from the 40 patients Phase 1 mirvetuximab soravtansine expansion cohort evaluating the use of prophylactic steroid eye drops. The findings support the use of eye drops in the Phase 3 FORWARD I trial.
Key Risk Factors & stock influences:
Disappointing data in pivotal or early studies as well as clinical setbacks could be cause for concern for the company.
Data from Forward I is the significant event for ImmunoGen, but it’s still a few years away, although there will be a futility analysis in the first half of next year to ensure the trial is worth continuing.
Near term catalysts like data from the phase 1 trial for IMGN779 later this year and more data from Forward II for patients treated with mirvetuximab soravtansine and Merck’s Keytruda in the first half of next year would continue to be a stock driver for IMGN.
The management expects that they should have adequate capital resources necessary to continue operations for at least the next twelve months subject to meeting its cash flow projections. Any deviation from these expectations, could affect level of liquidity, which may limit IMGN’s opportunities to grow or operate its business.
If IMGN raises additional funds through convertible debt or equity securities, the ownership of existing stockholders could be diluted.
Earnings Review
Revenues for the quarter ended June 30, 2017 were $39.0 million, compared to $7.4 million for the quarter ended June 30, 2016. License and milestone fees for the second quarter of 2017 included a $30 million paid-up license fee related to an amendment to the Company’s collaboration and license agreement with Sanofi and a $1 million Phase 1 milestone payment pursuant to the Company’s license agreement with CytomX. Revenues in the second quarter of 2017 included $6.4 million in non-cash royalty revenues, compared with $5.9 million in non-cash royalty revenues for the same quarter in 2016. Revenues for the second quarter of 2017 also included $0.9 million of research and development (R&D) support fees and $0.6 million of clinical materials revenue, compared with $1.3 million and $0.1 million, respectively, for the same quarter in 2016.
Operating Metrics & profitability:
ImmunoGen reported a net loss of $8.9 million, or $0.10 per basic and diluted share, for the second quarter of 2017 compared to a net loss of $45.9 million, or $0.53 per basic and diluted share, for the same quarter last year.
Cash Flow & Balance Sheet:
ImmunoGen had approximately $150.3 million in cash and cash equivalents as of June 30, 2017, compared with $160.0 million as of December 31, 2016, and had $100.0 million of convertible debt outstanding in each period. Cash used in operations was $8.9 million for the first six months of 2017, compared with $59.0 million for the same period in 2016. The current period benefited from a $30 million paid-up license fee received from Sanofi, which is included in revenue in the current period, and a $25 million upfront payment received from Debiopharm that is included in deferred revenue as of June 30, 2017. Capital expenditures were $0.8 million and $5.2 million for the six months ended June 30, 2017 and 2016, respectively.
Future Guidance:
ImmunoGen has updated its guidance for 2017. Expected revenues are now projected to be between $115 million and $120 million, compared with previous guidance of between $70 million and $75 million; and cash and cash equivalents at December 31, 2017 are expected to be between $90 million and $95 million, compared to previous guidance of $35 million to $40 million. These changes are a result of the Debiopharm and Sanofi agreements executed in the second quarter of 2017. Operating expenses remain unchanged and are expected to be between $175 million and $180 million.
ImmunoGen expects that its current cash plus expected cash revenues from partners and collaborators will enable the Company to fund operations into the second half of 2018.
Stock Performance:
On Friday, August 11th, 17, IMGN shares surged by 5.54% to $5.72 on an above average volume of 3.09 million shares exchanging hands. Market capitalization is $512.50M. The current RSI is 46.70
In the past 52 weeks, shares of IMGN have traded as low as $1.51 and as high as $8.04
At $5.72, shares of IMGN are trading below its 50-day moving average (MA) at $5.94 and above 200-day MA at $3.69
The present support and resistance levels for the stock are at $5.44 & $5.98 respectively.
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