), a biotechnology company, has entered into several agreements
with bigger companies like
Eli Lilly and Company
). ImmunoGen focuses on the development of novel anticancer
therapeutics using its antibody-drug conjugate (ADC) technology.
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Earlier in the month, ImmunoGen entered into a second licensing
deal with Novartis under a 2010 agreement. As per the terms of
the deal, Novartis will gain the exclusive right to use
ImmunoGen's ADC technology to develop anticancer candidates to an
As per the 2010 agreement, Novartis is responsible for the
development, manufacturing and marketing of any products
successful from the license agreement. For each licensing deal
under the agreement, ImmunoGen receives an upfront payment along
with milestone payments of up to $200 million plus royalties on
the sales of any resulting products. ImmunoGen has already
received $45 million as upfront payment under the agreement.
We note that Novartis has the right to terminate any development
and commercialization license with prior notice. Moreover, both
the companies may terminate each license for a material breach by
the other company.
ImmunoGen's revenues primarily consist of research and
development support fees, license and milestone fees. For fiscal
year 2013 (ending Mar 31), ImmunoGen received an $11 million
amortization of upfront license fees from Novartis. ImmunoGen
expects revenues for fiscal year 2014 in the range of $66-$70
We are encouraged by ImmunoGen's association with companies of
the likes of Novartis and Eli Lilly. The company is expected to
ink more deals in the future.
ImmunoGen presently carries a Zacks Rank #3 (Hold). Stocks such
) look better positioned with a Zacks Rank #1 (Strong Buy).