Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Is the Long Road to Royalties Over for ImmunoGen?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Two years later, and ImmunoGen (Nasdaq: IMGN  ) is finally on the last stretch toward bringing in royalty revenue from Roche's (NASDAQOTH: RHHBY.PK) trastuzumab emtansine.

It's been a long wait since the Food and Drug Administration issued a refuse-to-file letter for the drug that ImmunoGen helped develop. Ttrastuzumab emtansine is Herceptin -- that's the trastuzumab part --linked to toxic payload emtansine. The antibody conjugate technology was ImmunoGen's contribution.

If the FDA had accepted the marketing application and approved the drug, ImmunoGen would have gotten royalties over the past two years. But in the big scheme of things, those two years don't make too much difference. The drug would have been given an accelerated approval based on the phase 2 data and would probably have been used as a treatment of last resort.

Now Roche is submitting phase 3 data for trastuzumab emtansine, which should allow the drug to gain full approval. The drug should get a faster start now that Roche has data demonstrating a significant improvement in overall survival compared to patients who got GlaxoSmithKline's (NYSE: GSK  ) Tykerb plus Roche's Xeloda, the current second-line treatment.

The drug will be used as a secondary treatment, so sales -- and thus royalties due to ImmunoGen -- will still be somewhat minimal. For ImmunoGen to get substantial revenue from trastuzumab emtansine, the drug needs to move into the first like setting. Roche currently has the drug in multiple clinical trials to expand its use, but it'll be years before trastuzumab emtansine reaches sales levels comparable to Herceptin.

What I like about ImmunoGen's platform technology is that it isn't limited to just one drug. Trastuzumab emtansine is the furthest along, so it gets the most attention, but ImmunoGen also has deals with Sanofi (NYSE: SNY  ) , Bayer, Biotest, and Amgen (Nasdaq: AMGN  ) to develop antibodies with toxic payloads. ImmunoGen also has three drugs in the clinic that it's developing on its own.

I'm not the only one who's noticed, and you'll have to pay up for that potential. The company has a market cap over $1 billion, despite not having any drugs on the market. If you're going to buy ImmunoGen here, you should do it for the long term.

If you're looking for some non-pharma ideas for the long term, our analysts have three companies that deserve your attention. Find out what they are and why they like them so much in the free report, "3 Stocks That Will Help You Retire Rich." Claim your instant copy now.

Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of ImmunoGen. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1999737, ~/Articles/ArticleHandler.aspx, 10/24/2016 1:29:03 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 days ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
IMGN $2.28 Up +0.01 +0.44%
ImmunoGen CAPS Rating: ****
AMGN $158.51 Down -2.99 -1.85%
Amgen CAPS Rating: ****
GSK $41.13 Down -0.30 -0.72%
GlaxoSmithKline CAPS Rating: ***
SNY $37.75 Down -0.32 -0.84%
Sanofi CAPS Rating: *****