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ImmunoGen (IMGN) Up 18.8% Since Last Earnings Report: Can It Continue?

Zacks Equity Research

It has been about a month since the last earnings report for ImmunoGen (IMGN). Shares have added about 18.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is ImmunoGen due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

ImmunoGen Beats Earnings & Revenue Estimates in Q2

ImmunoGen reported loss of 29 cents per share for the second quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of 32 cents and the year-ago loss of 31 cents. The loss includes a restructuring charge of $19.3 million.

Revenues came in at $15.5 million in the quarter, beating the Zacks Consensus Estimate of $10.3 million. Revenues also increased from the year-ago quarter figure of $9.3 million. The second quarter of 2019 included $10.4 million in non-cash royalty revenues. The company recorded $5.1 million in license and milestone payments, which included a milestone payment of $5 million from Roche. Revenues from research and development (R&D) support were $0.05 million.

Operating Expenses & Cash Details

During the quarter, R&D expenses decreased almost 26.1% from the year-ago level to $28.6 million due to lower costs related to clinical development of mirvetuximab soravtansine and reduction in personnel expenses due to restructuring initiatives. General and administrative expenses were up less than 1% to $8.7 million in the second quarter of 2019. However, total operating expenses increased 17.8% year over year as the company recorded $19.3 million as restructuring charge. The restructuring plan was announced in June.

ImmunoGen’s cash and cash equivalents decreased to $239.8 million at the end of June 2019 compared with $270.4 million at the end of March 2019.

2019 Guidance

ImmunoGen provided its guidance for 2019 along with the second-quarter earnings release. The company expects full-year revenues to be in the range of $40-$45 million, similar to what was guided earlier on the fourth-quarter earnings call. The company expects its operating expense to be between $175 million and $180 million, much lower than the previously guided range of $265-$270 million. The company expects its cash and cash equivalents to be between $165 million and $170 million at 2019 end.  It expects its cash resources to be enough to fund its operation through the release of top-line results from the phase III study on mirvetuximab soravtansine, expected in the first half of 2022.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

At this time, ImmunoGen has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

ImmunoGen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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