During election time, it's not uncommon for some important newsworthy stories to get lost in the mix. One of those stories emerged Tuesday when ImmunoGen (NASDAQ:IMGN) and partner Roche (OTC:RHHBY) announced that T-DM1, their experimental drug to treat HER2-positive breast cancer, has been awarded a priority review by the Food and Drug Administration with a decision date expected for, or before, Feb. 26. ImmunoGen also announced that the European Medicines Agency has accepted Roche's marketing application for TDM-1 and put it under review.
T-DM1 has predominantly streamlined through clinical trials, with late-stage data demonstrating a 32% reduction in overall risk of death relative to the current treatment standard. In addition, T-DM1 improved the overall median survival rate to 30.9 months compared with the combination of GlaxoSmithKline's (NYSE:GSK) Tykerb and Roche's Xeloda, which had a median overall survival rate of 25.1 months.
A priority review is an important win for ImmunoGen on multiple fronts. Unlike Roche, ImmunoGen has no FDA-approved drugs, and it will continue to burn through its cash until it does. With $233.6 million in cash as of its latest quarter, that's hardly an immediate worry, but it nonetheless remains a concern on shareholders' minds. It's also worth noting that ImmunoGen's royalty rate on T-DM1 sales isn't nearly as lucrative as many on Wall Street had predicted. As my Foolish colleague Alex Planes noted two weeks ago, ImmunoGen is only expected to receive a 3% royalty on sales of the drug until it generates more than $700 million in sales each year, upon which the rate jumps to 5%. Many analysts were looking for this rate to begin at 5% (or higher), which makes getting this drug to market sooner rather than later all the more important.
This is also an important step for ImmunoGen's antibody-drug conjugate competitor Seattle Genetics (NASDAQ:SGEN), which currently has one FDA-approved drug -- Adcetris for the treatment of Hodgkin's lymphoma -- as well as 12 clinical stage ADC treatments focused on solid and blood-based tumors. The FDA appears to be taking a positive stance on bringing ADC drugs to review quickly because of their efficacy, which could bode well for Seattle Genetics in the immediate future.
On top of having a big pipeline like Seattle Genetics', ImmunoGen also has strong collaborative partnerships. In particular, its partnership with Roche in developing T-DM1, and with Sanofi (NASDAQ:SNY) in developing SAR3419 -- currently a mid-stage trial treatment for diffuse large B-cell lymphoma and B-cell acute lymphoblastic leukemia -- are its most crucial.
It looks like it's pedal-to-the-metal time for ADC developers, and ImmunoGen appears more than ready to burn some rubber in the fast lane.
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