After ImmunoGen (IMGN) sold the Kadcyla royalty that it receives from Roche in March, the biotech's quarterly earnings report has turned from an update on Kadcyla sales back into a chance for management to update investors on the company's pipeline.

Investors that feel the need to look through the profit-loss statement will notice that ImmunoGen is still booking the royalty, but most of it flows back out on the bottom of the statement as a "non-cash interest expense on liability related to sale of future royalty."

Kadcyla sales are still worth keeping an eye on because ImmunoGen's deal with TPG Special Situations Partners calls for ImmunoGen to keep 85% of the royalties after its paid $235 million or $260 million, depending on timing, to TPG Special Situations Partners, the company that purchased the royalty. But this quarter, the royalty amounted to $5.5 million, so Kadcyla sales are going to have to accelerate quite a bit if one of those thresholds is going to be met sometime this decade.

New drugs to watch
IMGN853, which now goes by its generic name, mirvetuximab soravtansine, has become ImmunoGen's new darling after presenting strong phase 1 data at the American Society of Clinical Oncology meeting last month. Mirvetuximab soravtansine produced a 53% response rate in ovarian cancer patients who had already been unsuccessfully treated with other drugs.

ImmunoGen is shooting for starting a phase 2 trial in the same late-stage patient population by the end of the year. Given the unmet need, strong phase 2 data could be enough to gain accelerated approval, although management is waiting for additional data from the phase 1 trial before discussing the possibility with regulators.

In addition to testing the drug in late-stage patients, ImmunoGen plans to start a trial in earlier-stage ovarian cancer patients by the end of the year. The trial will combine mirvetuximab soravtansine with "other anticancer agents" -- presumably already-approved drugs that are the standard of care. With the trial still in the planning stage, management wasn't willing to give more information, but it seems likely it would be a head-to-head trial testing the combination against the already-approved drug alone.

Folate receptor alpha, the target of mirvetuximab, is also expressed in lung and endometrial cancers, which ImmunoGen is exploring as a possible additional treatment population for the drug given the high activity in ovarian cancer patients with tumors expressing the target.

In addition to mirvetuximab soravtansine, ImmunoGen has a pair of drugs to treat diffuse large B-cell lymphoma: IMGN529 and coltuximab ravtansine, the latter of which was recently handed back by its former partner Sanofi.

IMGN529 is ready to enter a phase 2 trial later this year combining the drug with Biogen Idec and Roche's Rituxan. The path forward for coltuximab ravtansine is less clear, although ImmunoGen hopes to figure it out through preclinical testing and start a combination trial next year.

Antibody drug conjugates combine a targeting antibody (blue) with a toxic payload (orange). Source: ImmunoGen.

In addition to the wholly owned compounds, ImmunoGen has nine partnered compounds using its antibody-drug conjugate technology in the clinic and believes partners will moves another two to four compounds into the clinic by mid-2016. Management doesn't talk much about the development of partnered compounds, but did note that it "expects up to three partner compounds to advance into potentially pivotal phase 2 or phase 3 testing in 2016," so there could be more royalty revenue in a few years.

The most important measurement
Advancing drugs through the clinic is important, but only if a company has the cash to do so. The $200 million ImmunoGen received from selling the Kadcyla royalty helped the company finish the quarter, which is the end of its fiscal year, with $278 million.

ImmunoGen expects to burn through between $100 million and $105 million over the next year and spend another $13 million to $15 million on capital expenditures. That'll leave it with between $165 million and $170 million at the end of June 2016, which looks like enough cash to potentially make it through to a phase 2 data readout for mirvetuximab soravtansine, although, as biotechs are apt to do, the company might raise cash before then as a cushion.