Time to Buy ImmunoGen

With the overall stock market and the economy in shambles, is it time to start looking at beaten-down biotechs for large percentage moves. My choice for huge upside growth is ImmunoGen (IMGN). As many know, Genentech (DNA) recently announced that trastuzumab-dm1 will enter a pivotal phase 3 trial sometime during the first half of calendar 2009 for second line therapy for metastatic breast cancer MBC. ImmunoGen supplies the highly toxic maytansine which is conjugated to the herceptin to add to its killer potency.

But DNA already started a phase 2 trial for third line treatment begun in August 2008, which is expected to become a pivotal trial, according to DNA, should the data warrant. DNA also expects to release data at the San Antonio Breast Cancer Symposium from its most recent phase 2 trial, which began in July 2008. Preliminary data from the first 30 patients showed 1-CR and i believe 12 PRs, and 10 SD for a response rate well north of 50%. With many of the patients dosed, having already failed the TYKERB-XELODA regimen previously. Which ironically , wink, DNA will be comparing its pivotal trial to early next year.

Many already know that Herceptin, the antibody attached to IMGN's toxin, has worldwide sales of 5 billion dollars.. yes 5 billion dollars. And this next generation technology for trastuzumab-dm1 virtually ensures than Genentech will be able to continue to generate huge going forward revenues while paying ImmunoGen a nice single digit royalty. DNA has already released a tentative pathway to approval for this drug and expects FDA approval in late calendar 2010. With ImmunoGen currently trading in the $3.40 range, now would be an ideal time to begin accumulating a nice position in ImmunoGen in anticipation of the SABC, and the beginning of the official phase 3 trial.

Disclosure: Author holds a long position in IMGN