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What's in Store for ImmunoGen (IMGN) This Earnings Season?

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What's in Store for ImmunoGen (IMGN) This Earnings Season?

ImmunoGen's (IMGN) considerable progress with lead pipeline candidate, mirvetuximab soravtansine, is expected to drive investor interest in the second-quarter earnings call.

ImmunoGen, Inc. IMGN is scheduled to report second-quarter 2018 results on Jul 27, before market open. In the last reported quarter, the company delivered a negative earnings surprise of 11.11%.

ImmunoGen’s earnings performance has been dismal in the recent past. The company surpassed expectations in one of the last four quarters and missed the same thrice. ImmunoGen delivered an average four-quarter negative surprise of 14.39%.

Shares of ImmunoGen have significantly outperformed the industry so far this year. The stock has skyrocketed 55.1% compared with the industry’s increase of 1.8%.

Let’s see how things are shaping up for the upcoming announcement.

Factors at Play

With no approved product in ImmunoGen’s portfolio, investors should remain focused on the company’s progress with its lead pipeline candidate, mirvetuximab soravtansine, and other programs.

ImmunoGen has significantly advanced with respect to mirvetuximab soravtansine. In April, the company announced positive interim data from a phase III study (FORWARD I), evaluating the candidate as a single-agent therapy for treating patients with platinum-resistant ovarian cancer, whose tumors express high or medium levels of FR alpha. Enrollment in the study was completed two months ahead of schedule and top-line data is expected during the first half of 2019.

The company is also evaluating combination regimens of mirvetuximab soravtansine for treatment of patients with FR alpha positive ovarian cancer in a phase Ib/II FORWARD II study. The study consists of cohorts assessing mirvetuximab soravtansine in combination with Roche’s RHHBY Avastin, carboplatin or Merck’s Keytruda.

Data from the FORWARD II study, announced in May, showed that the combination regimens work better in patients with high or medium FR alpha. Patients in Avastin arm achieved an objective response rate (“ORR”) and progression free survival (“PFS”) of 43% and 7.8 months, respectively. The candidate in combination with Keytruda showed encouraging activity (ORR 63%; PFS 8.6 months). Last year, the company announced positive data from carboplatin arm with ORR of 71% and PFS of 15 months.

In June, the FDA granted Fast Track status to mirvetuximab soravtansine for the treatment of FR alpha positive ovarian cancer in second to fourth-line setting.

Apart from mirvetuximab soravtansine, ImmunoGen is also developing a couple of early-stage candidates including IMGN779 for refractory adult acute myeloid leukemia and IMGN632 to treat hematological malignancies.

The company expects its operating expense to increase in 2018 as it had raised the guidance to $200-$205 million from its earlier figure of $185-$190 million. Hence, we expect a rise in operating expense in the soon to be reported quarter.

What the Model Indicates

Our proven model does not conclusively show that ImmunoGen is likely to beat estimates this reporting cycle. This is because a stock needs to have both a positive Earnings ESP and a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: ImmunoGen has an Earnings ESP of 0.00% because the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of 29 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ImmunoGen has a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

We caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

ImmunoGen, Inc. Price and EPS Surprise


ImmunoGen, Inc. Price and EPS Surprise | ImmunoGen, Inc. Quote

Stocks to Consider

Here are two health care stocks with the right combination of elements to beat estimates this time around.

Horizon Pharma HZNP is scheduled to report second-quarter financial numbers on Aug 8. The company has an Earnings ESP of +19.66% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Keryx Biopharmaceuticals, Inc. KERX is expected to release second-quarter results on Jul 26. The company has an Earnings ESP of +23.25% and a Zacks Rank of 3.

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