ImmunoGen's Q2FY14 Earnings Surpass Expectations - Analyst Blog
03 Februar 2014 - 3:50PM
Zacks
ImmunoGen Inc.’s
(IMGN) second quarter fiscal 2014 (ending Dec 31, 2013) earnings of
4 cents per share, compared favourably to the Zacks Consensus
Estimate of a loss of 19 cents and the year-ago loss of 29 cents
per share. Results in the reported quarter were boosted by higher
revenues.
ImmunoGen’s revenues in the reported quarter jumped to $30.1
million from the year-ago figure of $2.6 million. The massive
increase in revenues was primarily due to a jump in license and
milestone fees. Revenues in the second quarter were also well above
the Zacks Consensus Estimate of $18 million.
Quarter in Detail
ImmunoGen’s revenues comprise research and development support
fees, license and milestone fees, royalty revenues and clinical
material reimbursement. The company received $25.7 million of
license and milestone fees during the quarter compared with $0.4
million received in the year-ago quarter.
The second quarter fiscal 2014 license and milestone fees included
$18.2 million of amortization of upfront license fees from
Novartis (NVS) for two development and
commercialization licences. The license and milestone fees during
the quarter also included a $5.0 million milestone from
Roche (RHHBY) for the approval of oncology drug
Kadcyla in the EU.
We note that ImmunoGen receives and recognizes royalties on Kadcyla
sales under an agreement with Roche. The drug was approved in the
U.S. in Feb 2013 for the treatment of patients suffering from
HER2-positive metastatic breast cancer (mBC). In Nov 2013, the drug
was approved in the EU for the same indication. Kadcyla is also
being studied for a number of additional indications.
The company recorded $1.9 million of research and development
support fees in the second quarter of fiscal 2014 down 5.6% from
the year-ago period. The company also recorded $2.3 million of
royalty revenues during the quarter.
The company’s total operating expenses decreased 3% to $26.3
million. ImmunoGen reported research and development (R&D)
expenses of $20.9 million during the quarter, down 3.7% year over
year. The decrease in R&D expenses was primarily due to a
decrease in clinical trial related costs following the
discontinuation of the IMGN901 study. General and administrative
expenses in the reported quarter remained almost flat at $5.4
million.
Outlook for Fiscal 2014
Apart from releasing its financial results, ImmunoGen also
maintained its guidance for fiscal 2014. The company maintained its
revenue guidance for fiscal year 2014 in the range of $71–$75
million. The Zacks Consensus Estimate of $72 million is within the
company’s guidance range.
ImmunoGen also retained its previous net loss guidance of $67
million to $71 million and operating expense guidance in the band
of $140 million and $144 million.
Our Take
The company has multiple pipeline related events in the coming
quarters. The discontinuation of the IMGN901 study in small-cell
lung cancer in Nov 2013 was indeed disappointing. The study had
failed to meet the primary endpoint of an improvement in
progression-free survival. Similar setbacks will weigh heavily on
the stock. We are however encouraged by ImmunoGen’s association
with big companies.
ImmunoGen presently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks include Zacks Ranked #1 (Strong Buy)
Actelion Ltd. (ALIOF).
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IMMUNOGEN INC (IMGN): Free Stock Analysis Report
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