What's happening: Share of ImmunoGen (NASDAQ:IMGN), a small-cap biotech with a focus on oncology, were a rare bright spot in the investing universe today -- the stock was up more than 8% at one point an otherwise brutal day for the averages.
Why it's happening: There doesn't appear to be any specific news driving the stock higher today, and the stock's trading volume is actually lower than average, which is not a combination that you typically see when a stock makes a strong move one way or the other. This Fool is scratching his head as to why shares are screaming higher on a day when the markets are filled with red ink, which serves as a reminder of the volatility of the biotech sector.
Nonetheless, today's move comes as a welcome surprise to ImmunoGen bulls, and it is a nice continuation of the stock's strong positive move for the year. Share are currently up more than 117% year to date, which looks especially promising when you consider that the S&P 500 has officially dipped into negative territory for the year.
ImmunoGen continues to run a variety of clinical trials from its broad pipeline of 13 potential compounds, most of which are in early stage trials. The majority of these trials are being run with the company's various partners, including some of the biggest players in the pharma world.
Despite its strong willingness to partner with others, the company has so far kept four compounds all to itself, and one in particular, mirvetuximab soravtansine, appears to have really wowed investors recently. This compound produced a 53% response rate in a phase 1 study of 22 patients who all had platinum-resistant ovarian cancer, which means they all have previously tried and failed on numerous other treatments. Investors bid the stock up huge on the day of the announcement, as the company believes that mirvetuximab soravtansine could be a treatment for a range of cancers.
Beyond its own compounds, the company is currently running two phase 3 clinical trials for Kadcyla, the company's only approved product, alongside its partner Roche. While these trials are the furthest along, it's important to remember that even if the trials are successful and they expand the clinical indication for Kadcyla that ImmunoGen is unlikely to benefit financially anytime soon. Earlier in the year the company sold its royalty rights to Kadcyla sales to TPG Special Situation Partners for $200 million, which helped to raise the company's financial position. The company has to repay either $235 million or $260 million, depending on the timing, before it would regain the royalty rights to future Kadcyla sales. Including this transaction, the company currently boasts access to $278 million in cash, which appears to be plenty of capital to keep the company well funded for at least two more years.
Long-term ImmunoGen bulls should look at today's stock movement as a welcome bright spot in their portfolio an otherwise gloomy day for the markets.
Brian Feroldi has no position in any stocks mentioned. The Motley Fool recommends ImmunoGen. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.