It has been about a month since the last earnings report for ImmunoGen (IMGN). Shares have lost about 7.2% 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 the most recent earnings report in order to get a better handle on the important drivers.
ImmunoGen Beats on Earnings in Q3, Lowers Guidance
ImmunoGen reported adjusted loss of 31 cents per share for the third quarter of 2018, narrower than the Zacks Consensus Estimate of a loss of 34 cents. The adjusted loss excludes restructuring charges. Moreover, including restructuring charges, the reported loss was 32 cents which was narrower than the year-ago loss of 61 cents per share on higher revenues.
Revenues came in at $10.9 million in the quarter, missing the Zacks Consensus Estimate of $12 million. However, sales increased 28.9% from the year-ago figure of $8.5 million. Revenues consist of $0.7 million in license and milestone fees and $8.4 million in non-cash royalty revenue. Revenues from R&D support and clinical materials were $0.4 million and $1.4 million, respectively. License and milestone fees included milestone payment of $0.5 million from privately-held Fusion Pharma.
Research and development expenses increased almost 50% from the year-ago level to $47.2 million, mainly on additional manufacturing costs to support commercial validation of mirvetuximab soravtansine and higher costs to support phase Ib/II FORWARD II study. Selling, general and administrative (SG&A) expenses were up 5.1% to $8.3 million in the third quarter of 2018.
The company recorded net proceeds of $162.5 million from the sale of its common stock in June.
ImmunoGen’s cash and cash equivalents decreased to $303.2 million at the end of September 2018 compared with $345.1 million at the end of June 2018. The company expects its current cash and estimated cash to fund its operations at least 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.
2018 Outlook Downgraded
The company decreased its revenue guidance to a range of $50-$55 million for 2018 from $60-$65 million expected previously. The Zacks Consensus Estimate for the metric is pegged at $56.14 million.
The company also reduced its expectation for cash and cash equivalents to the range of $250 million to $255 million from the previous expectation of $265 million to $270 million.
ImmunoGen however maintained its operating expenses guidance for 2018 in the range of $215-$220 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
At this time, ImmunoGen has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
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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