Analyst Conference Summary

conference date: February 9, 2018 @ 5:00 AM Pacific Time
for quarter ending: December 31, 2017 (Q4, fourth quarter 2017)

Forward-looking statements

Overview: "Robust Set of Data and Events Expected in 2018"

Basic data (GAAP):

Revenue was $39.4 million, up sequentially from $8.5 million, and up 186% from $13.8 million year-earlier.

Net income was negative $13.1 million, up sequentially from negative $57.7 million, and up from negative $34.2 million year-earlier.

Diluted EPS was negative $0.11, up sequentially from negative $0.61, and up from negative $0.39 year-earlier.

Guidance:

For the full year 2018 ImmunoGen expects revenue between $60 and $65 million, with operating expenses between $185 and $190 million. Cash and equivalents at end of year expected between $115 and $120 million.

Conference Highlights:

Mark Enyedy, CEO of ImmunoGen, said "Financially, we added over $235 million in cash and eliminated roughly $100 million in debt on the balance sheet through business development and financing transactions. With the momentum we generated in the last twelve months, we enter 2018 from a position of strength with a number of important catalysts expected during the year. We anticipate completing patient enrollment in our FORWARD I Phase 3 registration trial by mid-year, multiple data readouts from our FORWARD II trial assessing combinations with mirvetuximab beginning next month at the Society of Gynecologic Oncology annual meeting, and clinical data from our Phase 1 trials of both IMGN779 and IMGN632 later in the year.”

ImmunoGen made a collaboration and option agreement with Jazz Pharmaceuticals for IMGN779 and IMGN632, plus an additional future program. ImmunoGen received a $75 million fee.

Revenue by category: license and milestone $29.6 million; non-cash royalty revenue $7.6 million; R&D reimbursement $0.5 million; clinical materials $1.8 million.

Immunogen will outsource manufacturing and exit its Norwood facility by 2019.

Mirvetuximab soravtansine for FRα-positive platinum-resistant ovarian cancer Phase 3 trial FORWARD I should reach full enrollment by mid-2018. Futility only analysis expected in Q1 2018. First revenue from mirvetuximab soravtansine is possible in 2020. Has agreements with the FDA and EMA supporting full approval with a positive FORWARD I trial. "We believe mirvetuximab has the potential to replace chemotherapy in the FRα-positive platinum-resistant ovarian cancer segment."

Mirvetuximab soravtansine plus Avastin is in a Phase 2 trial, FORWARD II. Another cohort is enrolling in combination with Keytruda. Will also have cohorts in combination with PLD, and with carboplatin. Updated data will be presented at SGO in March, then at other conferences during the year.

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. Updated data was presented at ASH. Also looking to possible combination studies.

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

IMGN632 Phase 1 for a AML is a CD123-targeting ADC with a DNA-alkylating payload. It is intended to treat "a range of hematological malignancies, including AML and blastic plasmacytoid dendritic cell neoplasm (BPDCN)." First data possible in Q4 2018.

Partner Takeda filed an IND for TAK-164, for GCC-positive tumors. It is an ADC using the IGN platform. Phase 1 should start in the first half of 2018.

Bayer is partnered on anetumab ravtansine for mesothelioma. Results were announced for the Phase 2 trial. See Anetumab Ravtansine Does Not Improve PFS vs. Vinorelbine. Despite lower PFS, there were less severe adverse events. Bayer is also studying the drug in other applications and in combinations.

Cash and equivalents ended at $267 million, up sequentially from $195 million. $102 million net was raised from a stock offering in October. Convertible debt reduced to $2.1 million.

Operating expenses were $49.3 million consisting of: $39.8 million R&D; $9.0 million general and administrative; restructuring $0.4 million. Loss from operations $9.8 million. Non-cash interest expense of on future royalty $3.2 million. Non-cash conversion expense $0.7 million. Other income $0.7 million. No tax.

Q&A:

Mirv + Avastin combo patient characteristics? Benchmarks? At ASCO last year we presented data on heavily pretreated patients in dose escalation. Trial was expanded to include 2 cohorts: Avastin naive patients with 1 or 2 prior lines of therapy; and patients pretreated with Avastin, with up to five prior lines of therapy. We will be providing data on the subsets, noting the sample sizes are small. Patients included low, medium, and high FRα, and data will show those subsets.

Avastin combination going to Phase 3? The data provides support for moving up to earlier lines of therapy. We do not plan another Phase 3 trial this year.

We see an increasing role for ADCs both as single agents and as combination partner, perhaps replacing chemotherapy in combinations. We believe we have the most comprehensive ADC platform and toolbox in the industry, including linkers and payloads.

Collaborative co-development is a more attractive partnership strategy for us than just licensing out our therapies.

Guidance does not reflect as much license and milestone revenue as in 2017 because it is hard to predict milestones, which are relatively minor in the scheme of things.

All Mirvetuximab production is already with contract manufacturers. There were no FDA-related problems that led to the plan to close the Norwood facility. The change is about our growth aspirations.

PARP inhibitor competition in ovarian cancer? They have transformed treatment of platinum sensitive disease. But they have almost no effect in platinum-resistant disease. They also have safety and tolerance issues, making them hard to combine with chemotherapy. Mirvetuximab has better tolerability, so it could become the preferred combination agent in combinations for platinum sensitive disease. We already know Mirvetuximab has activity after patients fail a line of PARP inhibitor.

Finding 632 patients? We just opened the study, most are AML so far. No BPCM patients so far. We are just enrolling 3 patients at a time, it is not surprising to get 3 AML patients in the first group.

We do have outside interest in Mirvetuximab, but we have a high hurdle for a partner outside the U.S.

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