ImmunoGen Amends Lilly Agreement - Analyst Blog


ImmunoGen, Inc. ( IMGN ) amended its multi-target agreement with Eli Lilly and Company ( LLY ) initially signed in Dec 2011. As per the amendment, Lilly will have the right to extend the three-year right-to-test period of the agreement by up to two six-month periods. For this, Lilly will make additional payments to ImmunoGen.

Moreover, ImmunoGen will receive an additional exercise fee of $2 million for the license agreement retroactively. Lilly will also have the right to elect one of the additional development and commercialization licenses taken under the multi-target agreement without any exercise fee.

As per the initial agreement, Lilly had the rights to take exclusive options to individual targets selected by Lilly for specified option periods under certain restrictions. Lilly can also test ImmunoGen's maytansinoid TAP technology with Lilly's antibodies directed to the optioned targets under a right-to-test license.

Moreover, Lilly can utilize ImmunoGen's maytansinoid TAP technology for the development and commercialization of a certain number of individual targets. As per the initial agreement, Lilly did not have the right to extend the right-to-test period and ImmunoGen was not eligible to receive any exercise fee for the first development and commercialization license taken thereunder.

ImmunoGen has already received a $20 million upfront payment from Lilly for the execution of the right-to-test agreement. We note that the first development and commercialization license was taken on Aug 2013, when Lilly took its first exclusive license to a single target from ImmunoGen.

We note that ImmunoGen has several licensing agreements with big companies. Last month, the company entered into the third licensing deal with Novartis ( NVS ) under their 2010 agreement. As per the terms of the deal, Novartis will gain the exclusive right to use ImmunoGen's antibody-drug conjugate (ADC) technology to develop anticancer candidates to an undisclosed target. We are encouraged by the company's association with big companies.

ImmunoGen presently carries a Zacks Rank #2 (Buy). Some other stocks worth considering include Zacks Rank #1 (Strong Buy) Jazz Pharmaceuticals ( JAZZ ).

IMMUNOGEN INC (IMGN): Free Stock Analysis Report

JAZZ PHARMACEUT (JAZZ): Free Stock Analysis Report

LILLY ELI & CO (LLY): Free Stock Analysis Report

NOVARTIS AG-ADR (NVS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ADC , IMGN , JAZZ , LLY , NVS

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