I read the full report last night, it's very informative and interesting. It would take all day to present my arguments against the report, it's clearly written for a negative audience, similar to an AF report with more arguments than emotion and hyperbole.
A few interesting take away's are 2H 2014 - 2015 will be exciting and potantially volatile times for IMGN shareholders. We will know by the end of 2015 if IMGN has a valuable ADC platform and technology, or just 5% of 1-3+ successful products. Worst case is the platform does not work and they fire everyone and sell the cash flow and NOL's to Roche and Sanofi.
No credit/value is given to the platform, partnerships, early stage compounds, future milestones. The analyst basically argues, IMGN execs will continue to screw up developing the internal pipeline (based on their track record) and waste all of the cash flow from Kadcyla and the SAR MAb (they only 2 products in which they have confidence or place any value).
It's worth reading for informational purposes. If things go well over the next year, IMGN will have an opportunity to sell for well over $20 and if not, the downside of the cash flows and NOL's should at least be at this valuation. IMGN is low risk with the potential for a double, or triple if the platform or a few of the products work and if the BOD sells the company.
I'm afraid I have to agree that the internal pipeline is high risk. It seems like IMGN scientists and mgmt are not the best ADC target pickers. The near term addition to Kadcyla revenue will come from the partnered products.
901 is gone from the pipeline. 289 and 529 are too early. SAR3419 will be joining a crowded field of CD19 targeted molecules. Maybe 853 will still work despite Endocyte's failure, but 853 dosing seems complex. If BT ADCs continue to show promise, IMGN should opt in, and shut down their own internal pipeline trials unless they can also partner those risky ADCs.
I think this MS Analyst has an agenda to drive the market valuation down to a potential acquirers liking. How can he value as he did when IMGN has a rare asset as one of the few true MAB manufactures, a successful ADC platform and all the top pharma names using their technology with a total of 17 shots on goal! Is Morgan Standley smarter than Roche, Novartis, Sanofi, Bayer, Amgen, Lilly and BioTest?
I agree for the most part. Really they just need one every few years to work, and I think that will be biotest this year. 15 million will get them the opt in, and then its a matter of partnering the rest of their stuff so it doesn't hemorrhage while they try to get cash from their two main plays, kadcyla and bt-062.