IMGN: Immunogen Analysis and Research Report

2018-02-19 - by Asif , Contributing Analyst - 210 views

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ImmunoGen is a biotechnology company that is progressing toward becoming a fully-integrated company delivering innovative antibody-drug conjugate, or ADC, therapies that meaningfully improve the lives of people with cancer. An ADC with its proprietary technology comprises an antibody that binds to a target found on tumor cells and is conjugated to one of its potent anti-cancer agents as a “payload” to kill the tumor cell once the ADC has bound to its target. ADCs are an expanding approach to the treatment of cancer, with four approved products and the number of agents in development growing significantly in recent years.

Immunogen has established a leadership position in ADCs. The company's proprietary portfolio is led by mirvetuximab soravtansine, a first-in-class ADC targeting folate-receptor alpha, or FRα. In late 2016, the company initiated a Phase 3 registration trial, FORWARD I, with mirvetuximab soravtansine for use as single-agent therapy to treat patients with platinum-resistant ovarian cancer whose tumors express high or medium levels of FRα and who have received up to three prior treatment regimens. In June 2017, the company reported data on 113 ovarian cancer patients treated with mirvetuximab soravtansine from three Phase 1 expansion cohorts. From this pooled analysis, in the subset of 36 patients meeting the key eligibility criteria for FORWARD I, the confirmed overall response rate, or ORR, was 47 percent (95% CI 30, 65) and median progression-free survival, or mPFS, was 6.7 months (95% CI 4.1, 8.3). The safety profile of this pooled population was consistent with data previously reported (ASCO 2016), consisting of low grade, manageable adverse events. The Phase 3 FORWARD I trial is ongoing with sites enrolling in the United States, Canada and Europe.

Additionally, Immunogen is accruing patients in a companion study, FORWARD II, to evaluate mirvetuximab soravtansine in combination regimens to expand the number of patients with ovarian cancer eligible for treatment with the ADC. FORWARD II consists of cohorts assessing mirvetuximab soravtansine in combination with, in separate doublets, Avastin® (bevacizumab), pegylated liposomal doxorubicin, or PLD, carboplatin, and Keytruda® (pembrolizumab). Based on the encouraging profile of these combinations, Immunogen has advanced expansion cohorts for the Avastin and Keytruda combinations to Phase 2 testing and are planning an expansion cohort for a triplet combination evaluating mirvetuximab plus Avastin and carboplatin. The company reported the first clinical data from FORWARD II in June 2017 demonstrating that mirvetuximab soravtansine may complement currently available therapies in a range of treatment settings, including earlier lines of therapy. The company expect to report additional data from FORWARD II during 2018.

Immunogen has built a productive platform that continues to generate innovative and proprietary ADCs, including IMGN779, its CD33-targeting product candidate for acute myeloid leukemia, or AML. IMGN779 combines a high-affinity, humanized anti-CD33 antibody with one of its novel indolino-benzodiazepine payloads, called IGNs, which alkylate DNA without crosslinking, resulting in potent anti-leukemia activity with relative sparing of normal hematopoietic progenitor cells. The company reported the first clinical data from this trial in June 2017 demonstrating a favorable safety profile with repeat dosing, no dose-limiting toxicities and dose-dependent biological and anti-leukemia activity. IMGN779 is progressing through dose escalation in a Phase 1 trial in AML. The company also are advancing IMGN632, a CD123-targeting ADC that uses an even more potent IGN payload agent with a new engineered linker and novel antibody, which Immunogen is developing for hematological malignancies. The Investigational New Drug, or IND, application for IMGN632 was filed in September 2017 and the company expect to open Phase 1 testing before the end of 2017.

In August 2017, the company announced a strategic collaboration and option agreement with Jazz Pharmaceuticals to develop and co-commercialize ADCs. Jazz has exclusive worldwide rights to opt into development and commercialization of IMGN779, IMGN632, and a third program to be named later from its early-stage pipeline.

Collaborating on ADC development with other companies allows it to generate revenue, mitigate expenses, enhance its capabilities and extend the reach of its proprietary platform. The most advanced partner program is Roche’s marketed product, Kadcyla® (ado-trastuzumab emtansine), the first ADC to demonstrate superiority over standard of care in a randomized pivotal trial, EMILIA, and gain FDA approval. The company's ADC platform is used in candidates in clinical development with Amgen, Bayer, Biotest, CytomX, Debiopharm, Lilly, Novartis, and Sanofi. The company also have a partnership with Takeda, which is in the preclinical stage. The company expect that substantially all of its revenue for the foreseeable future will result from payments under its collaborative arrangements. In addition to the discussion below for agreements with activity in the periods presented, details for all of its significant agreements can be found in its 2016 Transition Report on Form 10-K.


In August 2017, the company entered into a collaboration and option agreement with Jazz Pharmaceuticals Ireland Limited (Jazz) granting Jazz exclusive, worldwide rights to opt into development and commercialization of two early-stage, hematology-related antibody-drug conjugate (ADC) programs, as well as an additional program to be designated during the term of the agreement. The programs covered under the agreement include IMGN779, a CD33-targeted ADC for the treatment of acute myeloid leukemia (AML) in Phase 1 testing, and IMGN632, a CD123-targeted ADC for hematological malignancies expected to enter clinical testing before the end of the year, and an early-stage program to be determined at a later date. Under the terms of the agreement, the company will be responsible for the development of the three ADC programs prior to any potential opt-in by Jazz. Following any opt-in, Jazz would be responsible for any further development as well as for potential regulatory submissions and commercialization.

As part of the agreement, Jazz made an upfront payment of $75 million to it. Additionally, Jazz will pay it up to $100 million in development funding over seven years to support the three ADC programs. For each program, Jazz may exercise its License Options at any time prior to a pivotal study or at any time prior to the filing of a biologics license application (BLA) upon payment of an option exercise fee of mid-double digit millions or low triple digit millions, respectively. For each program to which Jazz elects to opt-in, the company would be eligible to receive milestone payments based on receiving regulatory approvals of the applicable product aggregating $100 million plus tiered royalties as a percentage of commercial sales by Jazz, which will vary depending upon sales levels and the stage of development at the time of opt-in. After opt-in, the company would share costs associated with developing and obtaining regulatory approvals of the applicable product in the U.S. and EU. Immunogen has the right to co-commercialize in the U.S. one product (or two products, under certain limited circumstances) with U.S. profit sharing in lieu of Jazz's payment of the U.S. milestone and royalties to it.

Due to the involvement both companies have in the development and commercialization of the products, as well as both parties being part of the cost share agreement and exposed to significant risks and rewards dependent on the commercial success of the products, the arrangement has been determined to be a collaborative arrangement within the scope of ASC 808. Accordingly, the company segregated the research and development activities and the related cost sharing arrangement with Jazz. Payments for such activities will be recorded as research and development expense and reimbursements received from Jazz will be recognized as an offset to research and development expense in the accompanying statement of operations during the development period. Included in research and development expense for the three and nine month period ended September 30, 2017, is a $1.3 million credit related to reimbursements from Jazz.

As of September 30, 2017, $75 million is included in long-term deferred revenue, which represents the full amount of the upfront payment received from Jazz.


In May 2000, the company granted Genentech, now a unit of Roche, an exclusive license to use its maytansinoid ADC technology with antibodies, such as trastuzumab, or other proteins that target HER2. Pursuant to this agreement, Roche developed and received marketing approval for its HER2-targeting ADC compound, Kadcyla, in the U.S., Europe, Japan and numerous other countries. The company receive royalty reports and payments related to sales of Kadcyla from Roche one quarter in arrears. In accordance with its revenue recognition policy, $20.6 million of non-cash royalties on net sales of Kadcyla for the nine-month period ended June 30, 2017 were recorded and included in non-cash royalty revenue for the nine months ended September 30, 2017 and $19.5 million of non-cash royalties on net sales of Kadcyla for the nine-month period ended June 30, 2016 were included in non-cash royalty revenue for the nine months ended September 30, 2016. Kadcyla sales occurring after January 1, 2015 are covered by a royalty purchase agreement whereby the associated cash is remitted to Immunity Royalty Holdings, L.P, or IRH, as discussed further in Note E to the consolidated financial statements.


On May 30, 2017, the company and an affiliate of Sanofi amended the license agreements covering all compounds in development by Sanofi using its technology. Under the terms of the amended 2003 collaboration and license agreement, the company granted Sanofi a fully-paid, exclusive license to develop, manufacture, and commercialize four experimental compounds in development. The company also amended a separate 2013 exclusive license to grant Sanofi a fully-paid, exclusive license to develop, manufacture and commercialize another experimental compound being studied for the treatment of solid tumors. As consideration for these amendments, the company received a $30 million payment and agreed to forego a limited co-promotion option in the U.S. with respect to the compounds covered by the 2003 agreement, as well as future milestones or royalties under both license agreements.

In accordance with ASC 605 25 (as amended by ASU No. 2009 13), the company determined that there were no remaining deliverables upon execution of the amendments, and accordingly, the $30 million has been recognized as revenue and is included in license and milestone fee revenue for the nine months ended September 30, 2017.


In October 2008, the company granted Bayer an exclusive development and commercialization license to its ADC technology for use with antibodies or other proteins that target mesothelin. The company received a $4 million upfront payment upon execution of the agreement, and—for each compound developed and marketed by Bayer under this collaboration—Immunogen is entitled to receive a total of $170.5 million in milestone payments, plus royalties on the commercial sales of any resulting products. The total milestones are categorized as follows: development milestones—$16 million; regulatory milestones—$44.5 million; and sales milestones—$110 million. Through September 30, 2017, Immunogen has recognized an aggregate of $13 million in milestone payments under this agreement, including a $10 million development milestone related to initiation of a Phase 2 clinical study designed to support registration of its ADC product candidate, anetumab ravtansine, which is included in license and milestone fee revenue for the nine months ended September 30, 2016.


In January 2014, the company entered into a reciprocal right‑to‑test agreement with CytomX. The agreement provides CytomX with the right to test its payload agents and linkers with CytomX antibodies that utilize their proprietary antibody-masking technology, termed ProbodiesTM for a specified number of targets and to subsequently take an exclusive, worldwide license to use its technology to develop and commercialize Probody-drug conjugates directed to the specified targets on terms agreed upon at the inception of the right‑to‑test agreement. The company received no upfront cash payment in connection with the execution of the right‑to‑test agreement. Instead, the company received reciprocal rights to test its payload agents and linkers with ImmunoGen antibodies masked using CytomX technology to create Probody-drug conjugates directed to a specified number of targets and to subsequently take exclusive, worldwide licenses to develop and commercialize such conjugates directed to the specified targets on terms agreed upon at the inception of the right‑to‑test agreement. The terms of the right‑to‑test agreement require it and CytomX to each take its respective development and commercialization licenses by the end of the term of the research license. In addition, both the company and CytomX are required to perform specific research activities under the right‑to‑test agreement on behalf of the other party for no monetary consideration.

In February 2016, CytomX took its development and commercialization license that targets CD166. An amendment of the agreement executed simultaneously with that license granted CytomX the right, for a specified period of time, to substitute the specified target with another as yet unspecified target. Accordingly, the revenue associated with this license was deferred until the expiration of that substitution right in January 2017, whereupon the company recognized $12.7 million of the $13 million of arrangement consideration allocated to the development and commercialization license, which is included in license and milestone fee revenue for the nine months ended September 30, 2017. With respect to the development and commercialization license taken by CytomX, Immunogen is entitled to receive up to a total of $160 million in milestone payments plus royalties on the commercial sales of any resulting product. The total milestones are categorized as follows: development milestones—$10 million; regulatory milestones—$50 million; and sales milestones—$100 million. In June 2017, CytomX enrolled its first patient in a Phase 1 clinical trial for its product candidate, CX-2009, triggering a $1 million development milestone payment which is included in license and milestone fee revenue for the nine months ended September 30, 2017.

To date, Immunogen has not generated revenues from commercial sales of internal products and the company expect to incur significant operating losses for the foreseeable future. As of September 30, 2017, the company had $194.9 million in cash and cash equivalents compared to $160.0 million in cash and cash equivalents as of December 31, 2016.

The company anticipate that future cash expenditures will be partially offset by collaboration-derived proceeds, including milestone payments, upfront fees and development funding. Accordingly, period-to-period operational results may fluctuate dramatically based upon the timing of receipt of the proceeds. The company believe that its established collaborative agreements, while subject to specified milestone achievements, will provide funding to assist it in meeting obligations under its collaborative agreements while also assisting in providing funding for the development of internal product candidates and technologies. However, the company can give no assurances that such collaborative agreement funding will, in fact, be realized in the time frames the company expect, or at all. Should the company or its partners not meet some or all of the terms and conditions of its various collaboration agreements, the company may be required to secure alternative financing arrangements, find additional partners and/or defer or limit some or all of its research, development and/or clinical projects. However, the company cannot provide assurance that any such opportunities presented by additional partners or alternative financing arrangements will be entirely available to it, if at all.

Recent Pipeline Highlights

  • Activated more than 100 sites in North America and Europe in the Company’s ongoing Phase 3 FORWARD I trial of mirvetuximab soravtansine as single-agent therapy for platinum-resistant ovarian cancer enabling rapid patient enrollment;
  • Advanced the Company’s Phase 1b/2 FORWARD II trial in North America and Europe evaluating mirvetuximab soravtansine combination regimens in separate expansion cohorts with Keytruda® (pembrolizumab) and Avastin® (bevacizumab) for platinum-resistant disease, and initiated patient dosing in a new cohort to evaluate the triplet combination of mirvetuximab plus carboplatin and Avastin in patients with platinum-sensitive disease;
  • Reported updated safety data and preliminary anti-leukemia activity from the dose-escalation phase of the Phase 1 clinical trial of IMGN779 in patients with acute myeloid leukemia (AML) at the 2017 American Society of Hematology (ASH) Annual Meeting;
  • Began dosing patients in the Company’s Phase 1 clinical trial of IMGN632, a CD123-targeting ADC integrating a potent DNA-alkylating payload intended to treat a range of hematological malignancies, including AML and blastic plasmacytoid dendritic cell neoplasm (BPDCN); and
  • Received notice that partner Takeda has filed an IND for TAK-164, an ADC directed to GCC-positive tumors using ImmunoGen’s IGN platform.

Facilities Update

  • Following an in-depth review of the Company’s manufacturing strategy, ImmunoGen will move to an operating model that will rely on external manufacturing and quality testing for drug substance and drug product for its development programs. The implementation of this new operating model will lead to the ramp-down of manufacturing and quality activities at the Company’s Norwood, Massachusetts facility by the end of 2018, with a full exit of the site by early 2019. Decommissioning the Norwood facility will result in anticipated cost savings of over $20 million during the next five years.
  • The Norwood facility has been a long-standing staple of ImmunoGen’s business, delivering high-quality products to patients and partners without interruption for more than 25 years. The Company is grateful for the contributions that its Norwood-based employees have made and will support these employees through the transition.

Anticipated 2018 Events

  • Conduct interim analysis from FORWARD I, for futility only, in 1Q 2018;
  • Report updated dose-escalation findings from the FORWARD II mirvetuximab plus Keytruda combination cohort at the Society of Gynecologic Oncology annual meeting (March 2018);
  • Present highlights from ImmunoGen's technology and innovation in ADCs at the American Association for Cancer Research (AACR) annual meeting (April 2018);
  • Anticipate partner Takeda to begin clinical development of TAK-164 in the first half of 2018;
  • Report updated data from the FORWARD II mirvetuximab plus Avastin combination expansion cohort in over 50 patients in the first half of 2018;
  • Complete patient enrollment in FORWARD I by mid-year;
  • Report findings from the FORWARD II mirvetuximab plus Keytruda combination expansion cohort in over 30 patients the second half of the year;
  • Report additional data from IMGN779 Phase 1 study in 4Q 2018;
  • Report initial data from IMGN632 Phase 1 study in 4Q 2018; and
  • Advance its ADAM9 program into IND-enabling activities before year-end.

Financial Guidance

For 2018, ImmunoGen expects:

  • revenues between $60 million and $65 million;
  • operating expenses between $185 million and $190 million; and
  • cash and cash equivalents at December 31, 2018 between $115 million and $120 million.

ImmunoGen expects that its current cash combined with the expected cash revenues from partners and collaborators will enable the Company to fund its operations into the fourth quarter of 2019.-


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Asif - 2018-02-19

Investor Presentation - February 13, 2018.