What happened
Shares of ImmunoGen (IMGN 1.61%), a small-cap specialist in antibody-drug conjugates (ADCs), were up a healthy 13.1% as of 12:17 p.m. ET Wednesday. The biotech's shares are extending yesterday's rally following a positive top-line data readout for mirvetuximab as a treatment for platinum-resistant ovarian cancer.
What's noteworthy is that ImmunoGen's shares are up by double digits today despite a $175 million public offering announced after the closing bell Monday. That's a surefire sign that Mr. Market is indeed impressed with mirvetuximab's late-stage data.
Image source: Getty Images.
So what
ImmunoGen plans to seek approval from the Food and Drug Administration (FDA) for mirvetuximab in the first quarter of 2022, even though confirmatory data from a second trial isn't due out until late next year. The drugmaker's decision to move forward with a regulatory filing is based on the fact that mirvetuximab achieved a 32% objective response rate in this patient population.
The drug was also reportedly well tolerated in this study, with only 7% of patients dropping out of the trial. What's important to understand is that the current treatment options for advanced ovarian cancer have response rates in the low single digits and tend to come with significant toxicities.
Mirvetuximab, therefore, could be a major improvement in the standard of care for this patient population.
Now what
Is ImmunoGen stock still worth buying after its two-day rally? The biotech's market cap presently stands at approximately $1.4 billion. Mirvetuximab, if approved, is forecast to generate around $400 million in sales for this indication by 2026. As biotechs with newly approved oncology drugs tend to trade at between three to five times peak sales from a historical standpoint, ImmunoGen's shares appear to be fairly valued at this point. Mirvetuximab, after all, still has to get the green light from the FDA.
