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ImmunoGen (IMGN) Down 50.2% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research
United Technologies (UTX) closed at $137 in the latest trading session, marking a +0.89% move from the prior day.

It has been about a month since the last earnings report for ImmunoGen (IMGN). Shares have lost about 50.2% in that time frame, underperforming the S&P 500.

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

ImmunoGen Beats on Earnings & Sales in Q4

ImmunoGen 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 share due to lower revenues and higher costs.

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 at least through the first half of 2020, 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.

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.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

Currently, ImmunoGen has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, 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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