ImmunoGen (NASDAQ:IMGN) jumped as much as 31% on Friday after announcing earnings results for its second fiscal quarter that ended at the end of the calendar year. The biotech made money this quarter, which might be what investors are excited about, but don't expect the company to necessarily stay in the black.

Most of the $48 million in revenue in the quarter came from licensing and milestone fees, which can be very lumpy. In the second quarter, the company recorded $41 million in the category, compared to just $6.2 million in the prior quarter.

ImmunoGen's antibody drug conjugate adds cytotoxic drugs to antibodies to target them to tumors. Source: ImmnoGen

The lumpiness is purely an accounting issue. When partners license ImmunoGen's antibody drug conjugate technology, ImmunoGen typically gets upfront cash as part of the deal, but then has to amortize the up-front fees until the companies designate which antibody they're going to use the license on. During the second quarter, Novartis and Eli Lilly took licenses on deals that were established in 2010 and 2011 respectively, causing the payments to go onto the profit/loss statement in the second quarter, despite having received the cash years ago.

Royalty revenue from Roche for sales of Kadcyla, which unlike the licensing fees is a check the company can actually deposit in the bank, contributed $4.6 million to revenue. While the royalties were almost double royalties received in the year-ago quarter, the money isn't even close to enough to cover the company's $27 million research and development costs during the quarter.

In addition to all its partnered compounds, ImmunoGen has three drugs in phase 1 trials and expects to file an application to start clinical trials for a fourth drug in the second half of 2015. ImmunoGen plans to take its lead compound, IMGN853, into phase 2 trials in ovarian and/or endometrial cancer in the second half of the year as well, depending on the outcomes of an ongoing phase 1b trial.

U.S. sales of Kadcyla, where it's used as a second-line therapy in breast cancer, have been relatively flat because the new first-line therapy cocktail is keeping tumors knocked down longer. That's good news for patients, but delays when Roche gets the opportunity to treat the patients with Kadcyla.

For the second half of its fiscal year, ImmunoGen is looking for a net loss of $51 million to $56 million, but again the accounting number doesn't translate to actual cash. The company should burn through another $25 million or so in cash during the latter half of the fiscal year, which should leave the ImmunoGen with $75 million to $85 million in the bank.

While ImmunoGen has enough money to get into calendar year 2016 at the current spending rate, it'll need to raise more cash as its trials progress into later (i.e. larger and more expensive) clinical trials. Dave Johnson, ImmunoGen's chief financial officer, offered up a couple of possibilities, including doing a geographic based partnership where the biotech retains U.S. rights to the pipeline drug but gives up ex-U.S. rights in exchange for upfront fees and/or help paying for late-stage clinical trials. Other possibilities include selling its Kadcyla royalty or raising cash through a secondary offering, assuming the stock price appreciates as early stage data is revealed.

And of course ImmunoGen could also continue licensing its antibody-drug conjugate technology and collecting upfront fees, making for more lumpy revenue numbers.