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ImmunoGen (IMGN) Beats on Earnings & Sales in Q4, Shares Up

Zacks Equity Research

ImmunoGen, Inc. IMGN reported adjusted loss of 28 cents per share for the fourth quarter of 2018, narrower than the Zacks Consensus Estimate of a loss of 33 cents. However, the loss was wider than the year-ago loss of 10 cents per shares due to lower revenues and higher costs.

ImmunoGen’s shares were up 10.3% on Feb 8, presumably on beating estimates on both counts. However, shares of ImmunoGen have significantly underperformed the industry in the past six months. The stock has declined 38% compared with the industry’s decrease of 12.9%.

Revenues

Since ImmunoGen has no approved product in its portfolio, the company earns revenues through royalties, license and milestone payments plus research and development (R&D) support fees paid by its partners.

Revenues came in at $13.8 million in the quarter, beating the Zacks Consensus Estimate of $12 million. Sales decreased 65.1% from the year-ago figure of $39.4 million due to lower license and milestone fees. Revenues consist of $1.7 million in license and milestone fees and $9.7 million in non-cash royalty revenues. Revenues from R&D support and clinical materials were $0.2 million and $2.2 million, respectively.

Operating Expenses & Cash Details

Research and development expenses increased almost 8.2% from the year-ago level to $47.1 million. General and administrative (G&A) expenses were up 7.4% to $9.7 million in the fourth quarter of 2018.

ImmunoGen’s cash and cash equivalents decreased to $262.3 million at the end of December 2018 compared with $303.2 million at the end of September 2018.

The company expects its current cash and estimated cash revenues from partners and collaborators to fund its operations atleast through the first half of 2020, which is a year after the anticipated announcement of top-line data from the phase III FORWARD I study.

Full-Year Results

The company’s adjusted earnings per share were $1.17 per share for the full year, up 20.6% from the year-ago period.

Full-year revenues were down 53.4% to approximately $53.8 million. The company had recorded much higher license and milestone fees of $79.5 million in 2017, including $30 million received from Sanofi SNY related to an amended agreement and $29.5 million related to the sale of ImmunoGen’s IMGN529 asset to Debiopharm.

Pipeline Update

ImmunoGen has been progressing well with its pipeline product, mirvetuximab soravtansine. In October, the company announced preliminary data from the phase Ib/II FORWARD II study evaluating combination regimens with mirvetuximab soravtansine in ovarian cancer. Data showed that the candidate in combination with Merck’s MRK Keytruda achieved encouraging anti-tumor activity, especially in patients with medium or high FRα expression levels.

The company completed enrollment ahead of schedule in a cohort of the FORWARD II study which is evaluatingthe candidate in combination with Roche’s RHHBY Avastin and carboplatin in recurrent platinum-resistant ovarian cancer.

The company expects top-line data from the phase III study, FORWARD I, in first half of 2019. The study is evaluating mirvetuximab soravtansine as a single-agent therapy for treating patients with platinum-resistant ovarian cancer whose tumors express high or medium levels of FR alpha. The company anticipates filing regulatory applications for mirvetuximab soravtansine in the United States and Europe in the second half of 2019, assuming positive result from the study. The company has also validated and developed a commercial version of the candidate, which it expects to launch in 2020.

The company also submitted a pre-market approval application for a companion diagnostic test for the candidate.

Apart from mirvetuximab soravtansine, ImmunoGen is working to develop a couple of other candidates in early-stage studies including IMGN779 (relapsed or refractory adult acute myeloid leukemia) and IMGN632 (hematological malignancies including acute myeloid leukemia).

2019 View

The company expects 2019 revenues to be in the range of $40-$45 million. The Zacks Consensus Estimate is pegged at $56.4 million.

The company expects to end 2019 with cash and cash equivalents between $135 million and $140 million.

ImmunoGen expects operating expenses for 2019 in the range of $265-$270 million.

ImmunoGen, Inc. Price, Consensus and EPS Surprise

 

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

Zacks Rank

ImmunoGen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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