After 36 years of being in business, Immunogen (NASDAQ:IMGN) has yet to make a profit. Unfortunately, the biotech still isn't close to reaching break-even status.

Immunogen stock has lost over half of its value during the last 12 months. Despite the seemingly bleak situation, there are some reasons for cautious optimism about the biotech -- along with some worrisome factors. These three charts highlight the potential risks and rewards for investors considering buying Immunogen stock.

Risk and reward signs

Image source: Getty Images.

1. Promising pipeline

The key cog in Immunogen's pipeline is experimental ovarian cancer drug mirvetuximab soravtansine. The antibody-drug conjugate (ADC) is currently in a late-stage clinical study, with the first patient being dosed in January. 

Immunogen pipeline

Image source: Immunogen. 

Mirvetuximab soravtansine showed promise in an early stage study as a monotherapy in treating platinum-resistant ovarian cancer, especially in patients with three or fewer prior treatments. Immunogen is also evaluating its lead ADC in multiple early stage clinical trials in combination with other drugs.

Investors will still have to wait quite a while, though. The phase 3 study doesn't wrap up until 2019. The earliest Immunogen could bring the drug to market is 2020 -- and that's if all goes well.

Immunogen's new class of DNA-acting ADCs carrying indolinobenzodiazepine pseudodimers (IGN) payloads, including IMGN779, could prove to be powerful at fighting cancer yet not so toxic that multiple doses can be given to patients. However, these and other early stage candidates are also years away from being commercialized. 

2. Prior experience with Kadcyla

Immunogen has one product already on the market. The biotech licensed its ADC technology to Roche (NASDAQOTH:RHHBY) back in 2000. Roche won regulatory approval for Kadcyla as a second-line treatment for HER2-positive breast cancer in 2013. How successful has the drug been for Immunogen? It's complicated.

Immunogen Kadcyla royalties

Data source: Immunogen 10-K filing. Chart by author. 

Technically, Immunogen has made a lot more money from Kadcyla than this chart shows. The biotech received royalty payments from Roche through the end of 2014. However, Immunogen inked a deal with Immunity Royalty Holdings in 2015. Under the terms of this agreement, the biotech received $200 million in exchange for giving all Kadcyla royalties to Immunity Royalty Holdings up to a maximum of $260 million. 

Kadcyla has certainly been a success for Roche. The drug generated sales of around $820 million last year for the healthcare giant.

The good news is that Immunogen might one day see that kind of annual revenue or even more with mirvetuximab soravtansine. However, the cautionary note from experience with Kadcyla is that Immunogen will only reap those rewards if it retains rights to the drug.

3. Cash position

Cash position is all-important for any biotech that is losing money like Immunogen. So how do things look on that front? Pretty good -- for now.

IMGN Cash and Short Term Investments (Quarterly) Chart

IMGN Cash and Short Term Investments (Quarterly) data by YCharts.

This chart looks better than it might have thanks to a $100 million offering of convertible notes completed in June 2016. Immunogen thinks that its current cash position should fund operations through the second quarter of next year. 

The risk for investors is that Immunogen will unquestionably need to generate more cash in 2018, if not earlier. A dilution-causing stock offering could be on the way in the not-too-distant future.

Risk vs. reward

The opportunities with the company's pipeline seem promising. However, there's a lot of time remaining before any of that promise can be realized. And there's no guarantee that Immunogen won't run into problems along the way.

Some adventurous investors might like the risk vs. reward proposition offered by Immunogen. I tend to be more cautious. Immunogen is a biotech stock that I'll keep my eye on, but I'm not ready to recommend jumping aboard just yet.

Keith Speights has no position in any stocks mentioned. The Motley Fool recommends ImmunoGen. The Motley Fool has a disclosure policy.