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ImmunoGen (NASDAQ:IMGN) reported earnings for its fourth fiscal quarter. Now that the company sold its rights to royalty on Roche's Kadcyla, ImmunoGen is like any other development-stage biotech, focused on its pipeline rather than revenue and earnings numbers.

ImmunoGen results: The only metric that really matters


Q4 2016 Actuals

Q4 2015 Actuals

Fiscal 2016 (Decrease)

Cash, cash equivalents, and marketable securities

$245 million

$278.1 million

($33.1 million)

Data source: Company press release.

What happened with ImmunoGen this quarter?

  • The biotech met with the FDA, and got the agency to sign off on its proposed clinical trial design for its phase 3 study called FORWARD I, testing mirvetuximab soravtansine in platinum-resistant ovarian cancer patients who have previously been treated with up to three regimens.
  • FORWARD I, which the FDA agreed would be enough to get mirvetuximab soravtansine approved, should start treating patients before the end of the year.
  • Further behind mirvetuximab soravtansine, ImmunoGen made progress with its earlier-stage pipeline, enrolling its first patient in a phase 2 study of IMGN529 in combination with Roche's Rituxan in patients with diffuse large B-cell lymphoma. The company also started clinical testing of IMGN779 for acute myeloid leukemia, which should read out next year.
  • ImmunoGen decided to switch over to the standard quarters based on the calendar year, so it will have a short two-quarter year for the second half of this year, and then start over with the first quarter in January 2017.

What management had to say 

ImmunoGen only has four drugs in the clinic, but Mark Enyedy, ImmunoGen's CEO, reminded investors that the biotech has licensed its antibody drug conjugate (ADC) technology to other drugmakers, giving it more shots on goal: "Levering this platform we've entered into a number of high value partnerships with leading companies, such as Roche, Bayer, Amgen and Takeda. Collectively, our partners are developing nine clinical candidates that deploy our technology."

IMGN779 is behind other drugs that target CD33, including Seattle Genetics' (NASDAQ:SGEN) vadastuximab talirine, but ImmunoGen's chief development officer Charlie Morris highlighted reasons why it may come out on top: "The key difference lies in our payload's ability to alkylate DNA without cross-linking it, which we believe will allow for an improved tolerability profile and ability to repeat dose."

Looking forward

ImmunoGen believes that its current cash can last for another two years, but it will need more capital before getting mirvetuximab soravtansine approved because the data from FORWARD I won't be available until 2019. The additional capital could come from licensing its drugs or its ADC technology. Or the company could raise capital through a secondary offering, although that would be best done at a higher share price to avoid further diluting shareholders.

Fortunately, ImmunoGen has some value-creating events upcoming. In addition to the aforementioned trials for IMGN529 and IMGN779, the biotech is testing mirvetuximab soravtansine in earlier-stage stage ovarian cancer in combination with current treatments. Data from that trial, dubbed FORWARD II, should be available at the American Society of Clinical Oncology meeting next June.