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Why ImmunoGen Fell 15% Today

By Todd Campbell - Sep 21, 2015 at 4:50PM

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ImmunoGen's shares are falling after its investor conference last week and amid an industry wide rout.

What's happening:  After updating investors on its future plans last week and in the wake of an industrywide sell-off, ImmunoGen's (IMGN 4.35%) shares dropped by over 15% earlier today.

Why it's happening: Last week, ImmunoGen's shares rallied up into its investor conference only to trade-off after the company told investors it would be launching a series of expensive trials in the coming months.

Specifically, ImmunoGen plans to advance two phase 2 trials for its promising ovarian cancer drug, IMGN853, the first of which will evaluate IMGN853 as a monotherapy in pre-treated ovarian cancer patients and the second of which will combine IMGN853 with the current standard treatments in hopes of securing the drug's eventual use earlier in patient treatment. If all goes well, the first of those two trials could allow for an accelerated FDA pathway to approval 

ImmunoGen is also planning combination trials in B-cell cancers that will determine the safety and efficacy of IMGN529 and coltumixab ravtansine, which are two other promising therapies in its pipeline.

The clinical trial activity may draw down ImmunoGen's cash stockpile more quickly than some investors previously anticipated, which in turn could lead to additional and dilutive stock offerings down the line.

However, beyond the potential bump up in its cash burn and a bit of uncertainty tied to the timing of a potential filing, it doesn't appear that there is much in the way of "bad" news for long-term investors to worry about.

Instead, investor unease today may stem from news that Presidential-hopeful Hillary Clinton will announce plans to help curb sky high drug prices tomorrow.

Since the price of cancer drugs has steadily increased over the past decade and many new therapies now command six figure price tags, ImmunoGen investors are right to wonder whether or not any plans could limit potential returns on ImmunoGen's pipeline. Although it's uncertain what Hillary Clinton will announce, investors may be better served focusing on the long-haul opportunity associated with a larger and longer living population that is likely to require increasingly more treatment, such as cancer therapies in the works at ImmunoGen.


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