ImmunoGen (IMGN) Q1 Loss Wider Than Expected, Revenues Beat
Zacks Investment Research | May 06, 2018 09:12PM ET
ImmunoGen, Inc. (NASDAQ:IMGN) reported adjusted loss of 30 cents per share for the first quarter of 2018, wider than the Zacks Consensus Estimate of a loss of 27 cents. Moreover, loss in the quarter was also wider than the year-ago loss of 20 cents due to higher operating costs.
ImmunoGen’s shares were down 3.9% on May 4 presumably on increased operating expense outlook. However, shares of ImmunoGen have significantly outperformed the industry so far this year. The stock has soared 64.9% versus the industry’s decrease of 4.2%.
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 $19.8 million, which beat the Zacks Consensus Estimate of $15 million in the quarter. However, sales decreased 30.5% from the year-ago figure of $28.5 million. ImmunoGen recorded upfront fees of $10.9 million and $0.5 million from Takeda and Debiopharm, respectively, compared to $6 million in milestone payments in the year-ago quarter. However, the company also received $12.7 million in non-cash fees related to license agreement with CytomX last year.
Research & development (R&D) expenses increased 36.2% from the year-ago level to $44.8 million, mainly related to accelerated completion time of enrollment in phase III FORWARD I study. Selling, general and administrative (SG&A) expenses were up 23.5% to $10 million in the first quarter of 2018, primarily attributable to higher third-party service fees and stock-based compensation.
ImmunoGen’s cash and cash equivalents at the end of March 2018 was $218.4 million compared with $267.1 million as of December 2017. 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. The company has reached its enrollment target two months ahead of schedule.
Based on data from an interim analysis completed last month, the study continues with top-line data expected in first half of 2019.
Notably, combo therapies with mirvetuximab soravtansine in ovarian cancer are being evaluated in phase Ib/II FORWARD II study. The trial consists of cohorts assessing mirvetuximab soravtansine in combination with Roche's (OTC:RHHBY) Avastin and Merck's (NYSE:MRK) Keytruda. During the quarter, a third cohort was added to the study evaluating a triplet – a combination of mirvetuximab plus Paraplatin (carboplatin) and Avastin.
Data presented in March from analysis of mirvetuximab in combination with Keytruda in a subset of eight patients showed that the combination achieved a 63% confirmed overall response rate with a median progression free survival of 8.6 months. Based on these data, the study will enroll 35 more patients.
Apart from mirvetuximab soravtansine, ImmunoGen is working to develop a couple of other candidates in early stage studies including IMGN779 (relapsed or refractory adult acute myeloid leukemia) and IMGN632 (hematological malignancies including acute myeloid leukemia).
2018 Outlook Updated
The company maintained its revenues guidance the range of $60-$65 million for 2018. The Zacks Consensus Estimate for the metric is pegged at $62.5 million.
The company continues to expect cash and cash equivalents in the range of $115 million to $120 million.
However, ImmunoGen has increased its operating expenses guidance for 2018. Operating expenses are now expected in the range of $200-$205 million in 2018 compared with $185-$190 expected previously.
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