On November 2, 2017 ImmunoGen, Inc. (Nasdaq: IMGN), a leader in the expanding field of antibody-drug conjugates (ADCs) for the treatment of cancer, reviewed recent highlights and reported financial results for the quarter ended September 30, 2017 (Press release, ImmunoGen, NOV 2, 2017, View Source [SID1234521529]).
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“During the third quarter, we built upon the momentum in the business with strong operational execution and by significantly strengthening our capital position,” said Mark Enyedy, ImmunoGen’s president and chief executive officer. “The Jazz collaboration accelerates the development of our early-stage programs in hematological malignancies, and the proceeds from this transaction and the October financing extend our operating runway well beyond the expected timeframe of the readout of FORWARD I, our Phase 3 registration study for mirvetuximab. We are continuing to advance FORWARD I along with our FORWARD II trial evaluating mirvetuximab in multiple combination regimens, and look forward to presenting data on IMGN779 and IMGN632 at the ASH (Free ASH Whitepaper) Annual Meeting in December and opening the Phase 1 study for IMGN632 by year-end. Based on the progress made this year, we will enter 2018 with FORWARD I on track to complete enrollment by mid-year, clinical proof-of-concept for mirvetuximab’s potential role as a combination therapy, two agents deploying our novel IGN payload in the clinic, and a strong balance sheet.”
Recent Highlights
Proprietary Portfolio
Investigational new drug (IND) application activated to support clinical testing with IMGN632, a CD123-targeting ADC integrating a potent DNA-alkylating payload intended to treat a range of hematological malignancies, including acute myeloid leukemia (AML) and blastic plasmacytoid dendritic cell neoplasm (BPDCN);
Abstracts highlighting clinical and preclinical data for IMGN779, including updated safety and anti-leukemia activity from the dose-escalation phase of the IMGN779 first-in-human trial, and preclinical data for IMGN632 accepted for presentation at the 2017 American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting; and
FORWARD I and FORWARD II trials advancing in North America and Europe.
Business Development
Strategic collaboration and option agreement with Jazz Pharmaceuticals established, covering the development and commercialization of IMGN779 and IMGN632, as well as an additional program to be named during the term of the collaboration. ImmunoGen received a $75 million upfront fee in the third quarter under this agreement.
Balance Sheet
Completed an underwritten public offering of 16,675,000 shares of common stock raising net proceeds of $101.6 million (after deducting the underwriting discounts and offering expenses) in October; and
Converted $96.9 million of debt outstanding into 25,882,421 shares of the Company’s common stock, reducing the aggregate principal amount of the Company’s convertible debt to $3.1 million.
Partner Programs
Bayer announced findings at the World Conference on Lung Cancer from the pivotal Phase 2 trial assessing anetumab ravtansine, an ADC in development for patients with recurrent malignant pleural mesothelioma. Bayer is evaluating anetumab ravtansine in a variety of solid tumor indications, including as combination therapy and also presented data from a Phase 1b study assessing anetumab ravtansine in combination with pemetrexed and cisplatin in mesothelin-expressing predominantly epithelial mesothelioma or nonsquamous non-small cell lung cancer at the AACR (Free AACR Whitepaper)-NCI-EORTC meeting; and
Takeda presented preclinical data at the AACR (Free AACR Whitepaper)-NCI-EORTC meeting with TAK-164, an ADC directed to GCC-positive solid tumors using ImmunoGen’s IGN platform.
Anticipated Upcoming Events
Report updated Phase 1 clinical data for IMGN779 in adult patients with relapsed or refractory AML, IMGN779 preclinical combination data, and IMGN632 preclinical data at ASH (Free ASH Whitepaper) annual meeting;
Open a Phase 1 study for IMGN632 before year-end;
Activate more than 100 sites globally for the FORWARD I trial by year-end;
Initiate a cohort in the FORWARD II study to evaluate the triplet combination of mirvetuximab soravtansine/Avastin (bevacizumab)/carboplatin in patients with platinum sensitive folate receptor alpha (FRα)-positive epithelial ovarian cancer in 1Q 2018; and
Report updated dose escalation findings from the Phase 1b/2 FORWARD II Keytruda (pembrolizumab) cohort, along with updated data from the Avastin expansion cohort in the first half of 2018.
Financial Results
Revenues for the quarter ended September 30, 2017 were $8.5 million, compared to $7.7 million for the quarter ended September 30, 2016. Revenues in the third quarter of 2017 included $6.5 million in non-cash royalty revenues, compared with $6.2 million in non-cash royalty revenues for the same quarter in 2016. Revenues for the third quarter of 2017 also included $0.7 million of research and development (R&D) support fees and $1.2 million of clinical materials revenue, compared with $1.4 million and $0.1 million, respectively, for the same quarter in 2016.
Operating expenses for the third quarter of 2017 were $39.6 million, compared to $46.5 million for the same quarter in 2016. Operating expenses in the third quarter of 2017 include R&D expenses of $31.7 million, compared to $32.9 million for the same quarter in 2016. This change is primarily due to a workforce reduction resulting from the strategic review in September 2016 and lower third party costs, partially offset by increased clinical trial costs driven primarily by the advancement of the FORWARD I Phase 3 clinical trial. Operating expenses include general and administrative expenses of $7.9 million in the third quarter of 2017 compared to $9.5 million in the same quarter in 2016. This decrease is primarily due to lower personnel expenses and third-party service fees. Operating expenses in the prior period also include a $4.1 million restructuring charge related to the workforce reduction and a loss on leased office space.
During the third quarter of 2017, $96.9 million of convertible debt outstanding was converted into 25,882,421 shares of the Company’s common stock, resulting in a $22.2 million non-cash debt conversion charge recorded in the current period. With this conversion, the Company’s outstanding debt is reduced to $3.1 million.
ImmunoGen reported a net loss of $56.7 million, or $0.61 per basic and diluted share, for the third quarter of 2017 compared to a net loss of $44.7 million, or $0.51 per basic and diluted share, for the same quarter last year. This increase is primarily due to the $22.2 million non-cash charge relating to the conversion of the debt.
ImmunoGen had $194.9 million in cash and cash equivalents as of September 30, 2017, compared with $160.0 million as of December 31, 2016, and had $3.1 million and $100.0 million of convertible debt outstanding as of September 30, 2017 and December 31, 2016, respectively. Cash provided by operations was $37.1 million for the first nine months of 2017, compared with cash used in operations of $(106.8) million for the same period in 2016. The current period benefited from a $30 million paid-up license fee received from Sanofi, which is included in revenue in the current period, a $75 million upfront payment received from Jazz and a $25 million upfront payment received from Debiopharm, both of which are included in deferred revenue as of September 30, 2017. Capital expenditures were $0.8 million and $6.4 million for the nine months ended September 30, 2017 and 2016, respectively.
In October 2017, pursuant to a public offering, the Company sold an aggregate of 16,675,000 shares of its common stock, with net proceeds to the Company of $101.6 million, after deducting underwriting discounts and estimated offering expenses.
Financial Guidance
ImmunoGen has updated its guidance for 2017. Cash and cash equivalents at December 31, 2017 are expected to be between $260 million and $265 million, compared to previous guidance of $90 million to $95 million. These changes are a result of the Jazz agreement executed in the third quarter of 2017 and the proceeds provided by the public stock offering in October 2017. Revenue guidance remains unchanged and is expected to be between $115 million and $120 million.
Operating expenses are now expected to be between $170 and $175 million, compared to previous guidance of $175 to $180 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.
Conference Call Information
ImmunoGen will hold a conference call today at 8:00 am ET to discuss these results. To access the live call by phone, dial 719-325-4907; the conference ID is 6498153. The call may also be accessed through the Investors section of the Company’s website, www.immunogen.com. Following the live webcast, a replay of the call will be available at the same location through November 17, 2017.