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ImmunoGen (IMGN) Q3 Earnings & Sales Beat, Shares Rally

Zacks Equity Research

ImmunoGen, Inc. IMGN reported loss of 15 cents per share for the third quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of 19 cents and the year-ago loss of 31 cents. The loss includes a restructuring charge of $19.3 million.

Revenues came in at $13.3 million, beating the Zacks Consensus Estimate of $9 million. Revenues also increased from the year-ago quarter figure of $10.9 million. The third quarter revenues included $13.2 million in non-cash royalty revenues. Revenues from license and milestone fees were $0.08 million.

Operating Expenses & Cash Details

During the quarter, R&D expenses decreased 55.5% from the year-ago level to $21 million due to lower costs related to clinical development of mirvetuximab soravtansine and reduction in personnel expenses due to restructuring initiatives. General and administrative (G&A) expenses increased 10.3% to $9.2 million in the third quarter of 2019.

ImmunoGen’s cash and cash equivalents decreased to $204.5 million at the end of September 2019 compared with $239.8 million at the end of June 2019. The company’s sale of residual rights to Roche’s Kadcyla royalties in January 2019 benefited cash resources by $65.2 million in the third quarter.

Pipeline Update

Please note that mirvetuximab soravtansine failed in the late-stage FORWARD I study in March. However, the candidate demonstrated encouraging activity in the pre-specified subset of ovarian cancer patients with high folate receptor alpha expression. In May, the FDA had recommended to conduct a new phase III study to evaluate the candidate in this subset of ovarian cancer patients.

ImmunoGen stated on its third-quarter earnings call that it has met with the FDA to review the design of phase III study – MIRASOL – which will compare mirvetuximab soravtansine head-to-head with single agent chemotherapy in platinum-resistant ovarian cancer patients with high folate receptor alpha expression. The company expects to initiate enrollment in the study in the remainder of 2019.

During the third quarter, the company completed patient enrollment in a cohort of the phase Ib/II FORWARD II study evaluating mirvetuximab soravtansine in combination with Roche’s Avastin for recurrent platinum-resistant ovarian cancer in patients eligible for non-platinum-based regimen.

The company is also developing IMGN632 in phase II studies as monotherapy or in combination with Celgene’s CELG Vidaza or AbbVie ABBV/Roche’s Venclexta for treating acute myeloid leukemia. It is also developing IMGN632 monotherapy in early-stage studies in patients with acute myeloid leukemia, blastic plasmacytoid dendritic cell neoplasm and relapsed acute lymphocytic leukemia. A study was initiated during the quarter to evaluate IMGN632 monotherapy in minimal residual disease positive AML patients following frontline induction therapy.

ImmunoGen’s shares surged 27.7% on Nov 1, most likely due to the positive update on the new MIRASOL study. However, the stock has declined 36.7% so far this year against the industry’s increase of 4.8%.

2019 Guidance

ImmunoGen updated its guidance for 2019. The company raised its expectation for full-year revenues to the range of $65-$70 million from the previously expected range of $40-$45 million. The increase in the guidance reflects recognition of deferred revenues from Jazz Pharmaceuticals JAZZ as part of the collaboration related to development of IMGN779. ImmunoGen had discontinued all future development of IMGN779 as part of its restructuring initiatives started in June this year.

The company expects its operating expense to be between $170 million and $175 million, lower than the previously guided range of $175-$180 million. The company expects cash and cash equivalents to be between $170 million and $175 million at 2019 end (previously $165-$170 million). It expects its cash resources to be enough to fund its operations through the release of top-line results from the upcoming phase III study on mirvetuximab soravtansine, expected in the first half of 2022.

ImmunoGen, Inc. Price, Consensus and EPS Surprise

 

ImmunoGen, Inc. Price, Consensus and EPS Surprise

ImmunoGen, Inc. price-consensus-eps-surprise-chart | 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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