What's happening: Optimism that ImmunoGen's (NASDAQ:IMGN) promising ovarian cancer drug IMGN853 will eventually move the revenue needle for this clinical-stage biotech stock continues to drive shares higher. Although there was no new news, the stock soared 10% at one point today.

IMGN Chart

Why it's happening: ImmunoGen's shares have been on a tear since reporting that positive early-stage results for IMGN853 showed that a bit more than half of the 17 heavily pre-treated ovarian cancer patients responded to it.

The phase 1 findings clear the way for a phase 2 trial that, if successful, could form the basis for an accelerated FDA application for approval.

Typically, results from a confirmatory phase 3 trial would be necessary prior to applying for approval, but the significant unmet need for new treatment options for pre-treated ovarian cancer patients could lead to an accelerated timeline. If it does, then IMGN853 could become a valuable treatment option for an estimated 2,000 to 3,000 ovarian cancer patients who relapse or fail to respond to existing therapies annually.

However, ImmunoGen will need to deliver success in phase 2 before that may happen, and there's no guarantee that pricey mid stage trials will pan out. To help foot the bill for these studies, ImmunoGen unloaded some of its royalty stream rights to investors earlier this year in exchange for $200 million. After including that payment, ImmunoGen estimated in April that its cash stockpile will total between $265 million and $275 million exiting June. That's a solid cash position, but investors will need to keep an eye on expenses, which are likely to head higher as more trials begin. In the fiscal third quarter, ImmunoGen's operating expenses totaled $32.7 million.

Investors will get insight into its balance sheet when the company reports its fiscal fourth-quarter results on July 31. At the same time, ImmunoGen's management may offer up additional insight into their timeline for IMGN853's mid-stage trial, which is expected to begin prior to year end.