What happened

ImmunoGen (NASDAQ:IMGN) is up 15.6% at 3:35 p.m. EDT on no news. The stock price bump might be a carryover from yesterday's upgrade by Leerink Partners. Or maybe it's short-sellers buying to cover their shorts after yesterday's move. Or maybe it's just because it's a biotech and the sun came up today. Who knows?

So what

What is clear is that these short-term moves -- there was another unexplained one just last week -- have more to do with investor sentiment than ImmunoGen's fundamentals.

That said, investors are clearly hoping that the fundamentals will be different in the future, because valuations always revert to a company's ability to generate revenue and eventually profits. Investors wouldn't be willing to buy or hold at these higher prices if that weren't the case.

Doctor and patient having a conversation

Image source: Getty Images.

The next value-creating event will come in the form of data from a phase 1b/2 trial called FORWARD II, testing ImmunoGen's lead drug mirvetuximab soravtansine in combination with Avastin, carboplatin, Doxil, or Keytruda. Investors will also get to see pooled data from phase 1 trials testing mirvetuximab soravtansine in patients with ovarian cancer shortly. Both data sets are expected to be released this quarter.

The results aren't likely to be enough to get mirvetuximab soravtansine approved, but the data will help investors better interpret the likelihood that ImmunoGen's ongoing phase 3 trial will show the drug works better than placebo. That trial, dubbed FORWARD I, which is testing mirvetuximab soravtansine in patients with platinum-resistant ovarian cancer, will be enough to gain marketing approval by the Food and Drug Administration if the trial is successful.

Now what

Long-term investors can ignore these short-term moves -- like the ones that go in the opposite direction -- as they're not important to the overall investment thesis. If mirvetuximab soravtansine helps ovarian cancer patients, today's move will have no influence on the valuation after the FORWARD I data are revealed.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.