ImmunoGen (IMGN) Posts Narrower-than-Expected Loss In Q1

ImmunoGen, Inc. (NASDAQ:IMGN) reported a loss of 20 cents per share in the first quarter of 2017, narrower than both the Zacks Consensus Estimate of 36 cents and the year-ago loss of 37 cents. We note that effective from Jan 1, 2017, ImmunoGen has transitioned to a fiscal year ending Dec 31.

ImmunoGen’s shares gained 1.46% on May 5, 2017 following the earnings release. The company’s stock significantly outperformed the Zacks classified Medical-Drugs industry year to date. The company’s shares gained 104.4% compared with the industry’s increase of 5.4%.



Since ImmunoGen does not have any approved product in its portfolio yet, the company earns revenues through royalties, license and milestone payments, as well as research and development (R&D) support fees paid by its partners.

Revenues increased 45.7% year over year to $28.7 million and beat the Zacks Consensus Estimate of $18 million in the reported quarter. The increase in revenues was mainly driven by substantially higher license and milestone fees of $18.7 million, up 87% year over year. This included $6 million in partner milestone fees and $12.7 million license fees from the collaboration agreement with CytomX.

R&D expenses decreased 8.3% from the year-ago level to $33.1 million. This was primarily due workforce reduction as well as decreased costs associated with manufacturing clinical materials on behalf of the company’s partners. Selling, general and administrative (SG&A) expenses declined 27.7% to $8.1 million due decreased personnel expenses in the first quarter of 2017.

ImmunoGen’s cash and cash equivalents at the end of Mar 2017 were $126.6 million compared with $160.0 million as of Dec 2016. The company expects to use its current cash and expected cash to fund operations in the second quarter of 2018.

Pipeline Update

ImmunoGen is progressing well with its product pipeline. In Jan 2017, the first patient was dosed in a phase III study (FORWARD I) of its lead candidate mirvetuximab soravtansine for the treatment of platinum-resistant ovarian cancer. Since enrolling the first patient, the study was initiated in more than 40 sites in North America and Europe during the quarter.

Meanwhile, combination regimens with mirvetuximab soravtansine in ovarian cancer are being evaluated in the phase Ib/II FORWARD II study. The company expects to report initial data from FORWARD II study in the second quarter of 2017.

Furthermore, a phase I study on IMGN779 for the treatment of acute myeloid leukemia is currently underway. Initial data from the study should be out in mid-2017. Additionally, the company is planning to file an investigational new drug (IND) application for IMGN632, a CD123-targeting antibody-drug conjugate (ADC), in the third quarter of 2017.

The company also plans to file an IND application for another pipeline candidate, IMGN632, for treatment of multiple hematologic malignancies in the third quarter of 2017.

2017 Outlook

The company continues to expect revenues in the range of $70–$75 million, which includes $28 million of expected upfront and milestone fees from partners.

Operating expenses are projected in the range of $175–$180 million for 2017.

Cash and marketable securities are expected between $35 million and $40 million as of Dec 31, 2017.

Zacks Rank & Key Picks

ImmunoGen currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Galena Biopharma, Inc. (NASDAQ:GALE) , Aeglea Biotherapeutics, Inc. (NASDAQ:AGLE) and VIVUS, Inc. (NASDAQ:VVUS) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Galena’s loss per share estimates narrowed from $2.03 to 58 cents for 2017, over the last 60 days. The company posted positive earnings surprises in two of the four trailing quarters with an average beat of 53.83%.

Aeglea’s loss per share estimates narrowed from $3.64 to $2.48 for 2017 over the last 30 days. The company’s shares gained 54.7% so far this year.

VIVUS’s loss per share estimates narrowed from 50 cents to 39 cents for 2017, over the last 30 days. The company posted positive earnings surprises in all of the four trailing quarters with an average beat of 233.69%.

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