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ImmunoGen (IMGN) Posts Wider-than-Expected Q3 Loss

ImmunoGen, Inc. IMGN reported a loss of 37 cents per share in the third-quarter of fiscal 2016, wider than both the Zacks Consensus Estimate of a loss of 30 cents and the year-ago loss of 25 cents.

Since ImmunoGen does not have any approved product in its portfolio yet, the company earns revenues in the form of royalties, license and milestone payments, and research and development support fees paid by its partners.

ImmunoGen reported revenues of $19.7 million in the third quarter of fiscal 2016, up 72.8% from the year-ago period. However, revenues missed the Zacks Consensus Estimate of $25 million. The top line included a milestone payment worth $10 million from Bayer AG BAYRY for advancing anetumab ravtansine into a phase II study designed for product registration.

Research and development (R&D) expenses increased 40.5% from the year-ago quarter to $36.1 million. Likewise, selling, general and administrative (SG&A) expenses surged 60% to $11.2 million.

ImmunoGen continues to progress with its pipeline. Currently, the company is enrolling patients in the phase Ib/II study (FORWARD II) on its lead candidate, mirvetuximab soravtansine, for the treatment of FRα-positive ovarian cancer. The FORWARD II study is evaluating the candidate in combination with other approved anticancer agents.

Outlook Updated

ImmunoGen has updated its guidance for fiscal 2016. The company now expects revenues in the $60–$70 million band (previous projection: $70–$80 million). The new guidance includes the effect of changes in the expected timing of partner events.

Operating expenses, including R&D and SG&A expenditures, are expected in the range of $180 million to $185 million (previous projection: $175 million to $180 million).

The company expects net loss of $135–$140 million (previously $120–$125 million) in fiscal 2016.

Our Take

ImmunoGen’s third-quarter results were disappointing with the company reporting a wider-than-expected loss and missing on revenues. With no approved products in its kitty, we expect investor focus to remain on the development of the company’s lead candidate and other pipeline updates.

ImmunoGen is a Zacks Rank #3 (Hold) stock. A couple of better-ranked stocks in the health care sector include Aegerion Pharmaceuticals, Inc. AEGR and Gilead Sciences Inc. GILD, both sporting a Zacks Rank #1 (Strong Buy).

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