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Immunogen (NASDAQ: IMGN), one of the better performing cancer drug plays this year (up 14.4% since the start of the year), has quite a bit on its plate for 2013. The most immediate and pressing catalyst is the PDUFA action date of February 26, 2013 for the NDA submission of Trastuzumab emtansine. Trastuzumab emtansine is being developed as a treatment for HER2+ breast and gastric cancer by Immunogen's partner Roche (OTCQX:RHHBY), and is currently undergoing final stages of evaluation in the United States and the European Union.

If approved on February 26th, Trastuzumab emtansine will only have been approved for the treatment of HER2+ breast cancer that is metastatic in patients that have already tried the standard-of-care Herceptin (trastuzumab) and a taxane. This means that the drug will not be able to penetrate the breast cancer as thoroughly as a front-line therapy, which would hypothetically limit its total revenue potential.

On the bright side, it's not too difficult for Immunogen/Roche to expand its indication. The mechanism of action for Trastuzumab emtansine is actually based on Herceptin itself, since it uses the same HER2-binding antibody developed by Genentech (Roche). The difference is that Immunogen has attached their special "DM1 cancer-killing agent", which doesn't aim to kill cancer cells in the same way as a taxane (hence its potential efficacy in patients that have failed Herceptin treatment).

The trastuzumab emtansine story gets more complicated when you factor in the complexity of the metastatic breast cancer indication, which is being tackled through three separate phase III trials (one of which was completed).

The primary phase III trial, known as EMILIA, tested trastuzumab emtansine in the treatment of HER2+ metastatic breast cancer patients that were treated with Herceptin and a taxane. This basically means that the antibody-based targeting mechanism known as trastuzumab has already been used to treat these patients' breast cancers, although it is expected that the efficacy of the taxane itself didn't work that well against the cancer cells.

Taxanes are common anti-cancer cell compounds that are isolated from plants, and include docetaxel (Taxotere) and paclitaxel (Taxol). In the EMILIA trial, it was basically proven with statistical significance that Immunogen's DM-1 cancer killing agent was very successful in patients who had cancer cells that were somehow resistant to standard taxane therapy. It was largely because of these finalized results, presented at ASCO 2012, that IMGN did so well in the summer months of 2012. Not only did this improve the prestige of DM-1, but it showed that Roche's antibody targeting system was doing its job.

The MARIANNE trial, which has recently completed its enrollment process, will be testing trastuzumab emtansine as a first-line treatment of HER2+ for metastatic breast cancer. This trial gives us a very important catalyst in the future, as they could move IMGN more than the EMILIA trial did in 2012 due to the increased market potential of a first-line versus a "backup" therapy. The data is due at the end of this year, or at least within the first few months of 2014.

Lastly, we have the TH3RESA trial, which is basically the same thing as the EMILIA trial but is testing trastuzumab emtansine as a backup therapy for another cancer-killing agent known as Tykerb (lapatanib).

Immunogen seems to be surprisingly quiet given its approaching PDUFA date, and it seems that the market has been increasingly concerned about the company's financial situation. Expenses have been increasing, and revenue has been surprisingly sluggish due to a slowdown in collaboration revenue and milestone payments. It's also possible that the market is worried about additional share dilutions this year (despite Immunogen's $233 million pile of cash).

Although an FDA approval for trastuzumab emtansine would be a terrific positive development for IMGN, I don't think that the stock will necessarily rally after an FDA approval. Not only is there a more important clinical trial underway, but the supposedly positive catalyst could actually bring IMGN significantly lower due to profit-taking motive. However, unless IMGN gets a rejection by the FDA, I wouldn't expect it to fall below $12/share.

Source: ImmunoGen, Surprisingly Quiet Ahead Of FDA Decision