ImmunoGen Inc. (IMGN) is going to be a very essential player in the biotech sector in the near future. IMGN, a biotech company with a market capital of $1.4 billion, have developed anti-cancer therapeutic medications and engineered an effective strategy for administering anti-cancer agents called TAP (Targeted Antibody Payload). They use TAP technology to carry tumor-targeting antibodies with highly potent cell-killing agents through the bloodstream to kill cancer cells with less toxicity to skin and healthy tissue. IMGN is currently working with various partnerships, like Genentech (a member of Roche Group), for help with effectively administering their anti-cancer drugs using this TAP technology.
On February 22, 2013, IMGN announced the USFDA approval of Kadcyla, the first marketed drug (developed by Genentech) using IMGN's TAP technology for the treatment of HER2-positive metastatic breast cancer. Less than one month after receiving USFDA approval, Roche Group reported sales of Kadcyla of approximately $19.5 million during its quarter ending on March 31, 2013. With this approval, it's a successful first step for IMGN. IMGN received a $10.5 million milestone payment from Roche Group. In addition, IMGN will earn royalties on the commercial sales of Kadcyla, which is also receiving ongoing review for its approval in Europe and Japan. Roche Group expects to obtain formal permission in Europe by the end of 2013. They are in the meantime evaluating Kadcyla to treat other forms of cancer, such as gastric cancer (cancer of the stomach). They expect to submit this form of Kadcyla for approval for its use in 2015. With its successful sales of Kadycla in less than one month and its continued royalties, this is one of the catalysts that will push this stock higher going forward. I believe this stock will double or triple by early next year.
In addition to Kadcyla, IMGN has nine TAP compounds that are in the clinical trial phase, three of which they themselves own wholly. The remaining six TAP compounds are in the clinical trial phase with other partnerships. By the end of 2013, IMGN is expecting to receive clinical-stage testing data reports for the six TAP compounds from their partnerships. Receiving approval for Kadcyla was a big milestone for IMGN. If TAP technology works with Kadcyla, then other drugs using the same TAP technology are likely to be successful as well. Moreover, if IMGN can obtain FDA approval for some of its other drugs and continue licensing out its TAP technology, it will be on its way to becoming a very successful biotechnology company, which I predict will happen soon.
On April 26, 2013, IMGN reported positive 3rd-quarter earnings for 2013, and surprisingly beat the analyst's estimate by $.13. This gave me even more reason to like IMGN.
IMGN reported a net loss of $1.4 million, or $-.02 per diluted share, and that beats the analyst's estimate by $-.15, as compared to a net loss of $18.7 million, or $-.24 per diluted share, for the same quarter of the last year 3Q FY2012.
Revenues for 3Q FY2013 were $25 million, compared to $3.3 million for 3Q FY2012.
Operating expenses for 3Q FY2013 were $26.3 million, compared to $22 million in the same quarter last year.
IMGN had approximately $206.1 million in cash equivalents as of March 31, 2013 and no debt. Have cash and no debt? As an investor, I do love to hear that.
Considering their innovation of TAP technology and the methods they're pursuing to cure cancer, IMGN will be an important biotechnology company in winning the war against cancer, the yet-incurable disease. With Kadcyla already approved, and their continued partnerships with other biotech companies, IMGN is beginning to see great value in their own compounds. I think IMGN will turn out to be a very profitable company and we're going to hear a lot from them. I'm very bullish on IMGN as a short term and long term investment. I think IMGN will be the next Celgene Corp. (CELG) and Gilead Sciences Inc. (GILD) in biotechnology. Compared to CELG and GILD, with their market capital of over $50 billion each, IMGN is small and has plenty of room to grow. Right now, I'm positive that IMGN will be a $30 stock by the end of this year.