Analyst Conference Summary

ImmunoGen
IMGN

conference date: February 17, 2017 @ 5:00 AM Pacific Time
for quarter ending: December 31, 2016 (fourth quarter 2016)


Forward-looking statements

Overview: Initiated the Phase 3 trial for mirvetuximab soravtansine for ovarian cancer. Made significant progress cutting costs.

Basic data (GAAP):

Revenue was $13.8 million, up sequentially from $7.7 million, but down from $18.0 million year-earlier.

Net income was negative $34.2 million, up sequentially from negative $44.7 million, and up from negative $33.2 million year-earlier.

Diluted EPS was negative $0.39, up sequentially from negative $0.51, and up from negative $0.38 year-earlier.

Guidance:

Full year 2017 revenue expected between $70 and $75 million. Operating expenses between $175 and $180 million. Cash and marketable securities will drop to $35 to $40 million by year end.

[So cash will have to be raised. Hopefully after some good data comes in, so dilution will be minimal. But is looking to partner or sell some assets, which would also do it. --WPM]

Conference Highlights:

"We enter 2017 well positioned to deliver on multiple clinical milestones. In January, we advanced our lead program to Phase 3, dosing the first patient in the FORWARD I study of mirvetuximab soravtansine in ovarian cancer. At the Society of Gynecologic Oncology annual meeting next month, we will present data from the mirvetuximab biopsy cohort, followed by initial data in the second quarter from the mirvetuximab combination regimens being evaluated in our FORWARD II study. We are also excited about the potential of our DNA-alkylating ADCs and expect to report the first data from the Phase 1 study of IMGN779 for acute myeloid leukemia in mid-2017 and to file an IND for IMGN632 in the third quarter," said Mark Enyedy, CEO.

Immunogen will shift from fiscal year reporting to calendar year reporting on January 1, 2017. So the December 2016 quarter, rather than being the second fiscal quarter 2017 under the old system, is effectively the fourth quarter of 2016.

First revenue from mirvetuximab soravtansine is possible in 2020. Obtained agreements with the FDA and EMA supporting full approval with a positive FORWARD I trial.

Revenue by category: license and milestone $5.1 million; non-cash royalty revenue $6.7 million; R&D reimbursement $1.4 million; clinical materials $0.6 thousand. That included a $5 million milestone payment from Novartis, but that cash will come in in Q1.

Mirvetuximab soravtansine for FRα-positive platinum-resistant ovarian cancer Phase 3 trial FORWARD I enrolled its first patient in January. PFS (progression free survival) will be the primary endpoint. There will be 333 patients with high or medium FRα levels randomized 2:1 against physician's choice of single agent chemotherapy. Also Phase 1 expansion cohort results were published in December.

Mirvetuximab soravtansine plus Avastin is in a Phase 2 trial, FORWARD II. Will also have cohorts in combination with PLD, carboplatin, and Keytruda. Initial 1b/2 data will be presented in Q2 2017.

IMGN779 is in a Phase 1 trial for AML (acute myeloid leukemia). 779 is differentiated from other agents targeting CD33 by its ability to alkylate DNA without cross-linking it. Preclinical data was presented at ASH in December. Phase 1 data should be reported in 2017.

IMGN529 is in a Phase 2 trial for DLBCL (diffuse large B-cell lymphoma). It has orphan drug designation.

IMGN632 preclinical data was presented at ASH in December. Phase 1 for a AML should start in 2017, following the IND submission in Q3 2017 and approval.

Sanofi is advanced isatuximab (SAR650984) with pom-dex into a Phase 3 multiple myeloma trial in Q4.

Novartis started the Phase 1 trial of HKT288 for ovarian cancer and renal cell carcinoma in December.

Believes that new payloads, linkers, and antibodies will allow more types of cancer to be treated.

Cash and equivalents ended at $160 million, down sequentially from $196 million. Long-term liabilities were $100 million in convertible debt and $198 million, mostly long-term deferred revenue from Kadcyla future royalty deal.

Operating expenses were $42.5 million consisting of: $33.7 million R&D; $8.5 million general and administrative; $0.3 million restructuring. Loss from operations $28.6 million. Non-cash interest expense of on future royalty $3.6 million. Other expense $1.9 million. No tax.

ImmunoGen has undertaken a cash management review in order to extend runway to two years. That should get programs through several significant value inflection points.

Q&A:

FORWARD I design high-expressor cohort and endpoint? It is powered robustly, with sufficient power for the overall population as well as the 2/3 with high expression. We can claim success with either the entire population or the high-expression population, depending on the results.

It would be extremely unlikely that we would have positive data for the overall population and yet did not have positive data in the high-expression population.

779 Phase 1 number or patients, stem-cell transplant status? Enrolling quickly, so we should have safety data from several cohorts by midyear. These are relapsed/refractory patients, a subset of them will have already had stem-cell transplants and then relapsed.

Ocular toxicity management with mirvetuximab? We are happy with the current method. We are using lubricating eye drops plus cortico-steroid eye drops.

Biopsy cohort? Poster format at SGO supporting selection strategy based on archival tissue FRα expression.

Combination cohorts? We will present dose escalation data for all four combinations. Focus is on safety, but will present any efficacy data available.

Plans for raising cash? DLBCL assets are in discussions to be monetized. We are also talking to potential partners about our other products, particularly the AML products.

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Disclaimer: My analyst call summaries may include both condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes which I share with other investors and which I use as the basis of my blog and Seeking Alpha articles.

Copyright 2017 William P. Meyers