ImmunoGen Q4 Loss Narrower than Expected, Provides Guidance - Analyst Blog


ImmunoGen Inc. ( IMGN ) reported fourth quarter fiscal 2014 (ending Jun 30, 2014) loss of 31 cents per share. The company's loss was narrower than the Zacks Consensus Estimate of a loss of 36 cents but wider than the year-ago loss of 26 cents per share. Results in the reported quarter were affected by higher expenses.

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ImmunoGen's revenues in fourth quarter fiscal 2014 increased 49.9% year over year to $5.7 million. The increase in revenues in the quarter was primarily due to higher royalty revenues. Revenues in the reported quarter were however well below the Zacks Consensus Estimate of $11 million.

ImmunoGen reported fiscal 2014 (ending Jun 30, 2014) loss of 68 cents per share, excluding a non-cash expense related to the company's collaboration with CytomX. The company's loss was narrower than the year-ago loss of 87 cents and the Zacks Consensus Estimate of a loss of 85 cents. ImmunoGen's loss in the fiscal year including the non-cash expense was 83 cents. ImmunoGen's revenues in fiscal 2014 increased 68.6% year over year to $59.9 million, but were well below the Zacks Consensus Estimate of $72 million.

Quarter in Detail

ImmunoGen's revenues comprise research and development support fees, license and milestone fees, royalty revenues and clinical material revenues. The company received $0.3 million of license and milestone fees during the quarter compared with $0.9 million received in the year-ago quarter.

We note that ImmunoGen receives and recognizes royalties on Kadcyla sales under an agreement with Roche ( RHHBY ). The drug was approved in the U.S. in Feb 2013 for the treatment of patients suffering from HER2-positive metastatic breast cancer. In Nov 2013, the drug was approved in the EU for the same indication. The company recorded $3.4 million of royalty payments from Roche during the fiscal fourth quarter for sales of Kadcyla in the first quarter of calendar year 2014. Kadcyla is being developed for other indications as well.

ImmunoGen's research and development support fees in the fourth quarter of fiscal 2014 were down 39.8% to $1.3 million. The company also recorded $0.7 million of clinical materials revenue during the quarter compared with $0.2 million in the year-ago quarter.

Total operating expenses increased 25.1% to $32.2 million. ImmunoGen reported research and development (R&D) expenses of $25.8 million during the quarter, up 26.4% year over year. General and administrative expenses in the reported quarter increased 20.1% to $6.5 million.

Fiscal 2015 Outlook

Apart from releasing its financial results, ImmunoGen also provided a fiscal 2015 guidance. The company expects fiscal 2015 total revenues in the range of $100 million to $105 million. The Zacks Consensus Estimate of $104 million is on the higher end of the company's guidance.

ImmunoGen expects net loss in the $60 million to $65 million band. The company's net loss for fiscal 2014 came in at $71.4 million. The company expects fiscal 2015 operating expenses in the range of $160 million to $165 million, a rise from $131.4 million incurred in fiscal 2014.

Our Take

ImmunoGen's fourth quarter fiscal 2014 results were encouraging. We are also encouraged by ImmunoGen's alliances with big companies like Roche and Sanofi ( SNY ). Last month, the company received a $3 million milestone payment from Sanofi, relating to pipeline advancement. Moreover, the company has multiple pipeline related events in the coming quarters. We expect investor focus to remain on these events.

ImmunoGen presently carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Zacks Ranked #1 (Strong Buy) Actelion Ltd. ( ALIOF ).

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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: RHHBY , SNY , ALIOF , IMGN

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