Disclosure Insight's  Instablog

ImmunoGen (NASDAQ: IMGN) announced this morning that it had entered into a collaboration agreement with Eli Lilly (NYSE: LLY). The agreement is good news for IMGN as it represents another potential revenue source for a company that has yet to generate any product sales.

Under the agreement, LLY will pay a $20 million upfront fee to obtain a “limited number” of licenses to use IMGN’s maytansinoid Targeted Antibody Payload technology to develop anticancer therapeutics. In addition to the upfront fee, IMGN is eligible to receive up to $200 million in milestone payments for each license as well as royalties on the sales of any resulting products.

LLY joins a list of other major drug manufacturers as a significant collaborative partner. Agreements with Amgen, sanofi-aventis, Bayer HealthCare, and Biotest accounted for 41%, 23%, 17%, and 9%, respectively, of IMGN’s $19.3 million in FY11 revenue. That $19.3 million represented just 24% of operating expenses. The $20 million upfront payment received from LLY adds to the company’s $180 million in cash and equivalents held as of 30-Sep-11.

This is the press release announcing the agreement.