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ImmunoGen (IMGN) Q4 Loss Wider Than Expected, Revenues Grow


ImmunoGen, Inc. IMGN reported adjusted loss of 10 cents per share in the fourth quarter of 2017, wider than the Zacks Consensus Estimate of a loss of 7 cents. However, the loss is significantly narrower than the year-ago figure of loss of 39 cents.

Shares of ImmunoGen have significantly outperformed the industry in a year’s time. The stock has soared 275.9% versus the industry’s decrease of 2%.

Since ImmunoGen has no approved product in its portfolio, the company earns revenues through royalties, license and milestone payments plus research and development (R&D) support fees paid by its partners.

The company reported revenues of $39.5 million, which missed the Zacks Consensus Estimate of $41 million in the quarter. However, sales increased significantly by 185.5% compared with the year-ago figure. This upside was mainly driven by substantially higher license and milestone fees of 29.5 million related to divestment of its non-core B-cell assets – IMGN529, in November last year to Debiopharm International.

Research & development (R&D) expenses increased 18.1% from the year-ago level to $39.8 million, mainly related to costs incurred for advancing the company’s lead pipeline candidate, mirvetuximab soravtansine, into combination trials. Selling, general and administrative (SG&A) expenses rose 5.9% to $9 million in the fourth quarter of 2017 compared with the year-ago number.

ImmunoGen’s cash and cash equivalents at the end of December 2017 were $267.1 million compared with $160 million as of December 2016. The company expects its current cash and the estimated cash to fund its operations through the fourth quarter of 2019.

Pipeline Update

ImmunoGen has been progressing well with its pipeline product, mirvetuximab soravtansine. The candidate is currently in a phase III study (FORWARD I) as a single-agent therapy for treating patients with platinum-resistant ovarian cancer, whose tumors express high or medium levels of FR alpha.

Notably, combo therapies with mirvetuximab soravtansine in ovarian cancer are in the phase Ib/II of FORWARD II study. The trial consists of cohorts assessing mirvetuximab soravtansine in combination with Roche's RHHBY Avastin and Merck's MRK Keytruda. Initial data from the study demonstrated that the candidate has potential to complement all available therapies for the indication. Updated data from the program are expected in the first half of 2018.

Apart from mirvetuximab soravtansine, ImmunoGen is working to develop a couple of other candidates including IMGN779 and IMGN632. In December 2017, ImmunoGen released positive findings from the ongoing phase I study, evaluating IMGN779 on patients with relapsed or refractory adult acute myeloid leukemia (AML) at the annual meeting of American Society of Hematology. Earlier, this January, the company moved IMGN632 into clinical development to treat hematological malignancies including AML.

2017 Results

Full-year sales jumped 137.4% year over year to $115.4 million. Revenue growth is in line with the previous expectation of $115-$120 million.

The company reported a loss of 74 cents per share in 2017, narrower than the year-ago tally of $1.80 per share.

2018 Outlook

The company expects revenues in the range of $60-$65 million for 2018. The Zacks Consensus Estimate for the metric is pegged at $64.8 million for the year.

Operating expenses are projected in the band of $185-$190 million during the period.

Moreover, the company anticipates cash and cash equivalents to stand in the range of $115-$120 million at 2018-end.

ImmunoGen, Inc. Price, Consensus and EPS Surprise

ImmunoGen, Inc. Price, Consensus and EPS Surprise | ImmunoGen, Inc. Quote

Zacks Rank & Another Key Pick

ImmunoGen carries a Zacks Rank #2 (Buy). Another top-ranked stock in the health care sector is XOMA Corporation XOMA, carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

XOMA’s loss per share estimates have narrowed from 99 cents to 42 cents for 2018 over the last 60 days. The company came up with an average beat of 47.92%. The stock has skyrocketed 428.2% in the last 12 months.

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