) reported third quarter fiscal 2014 (ending Mar 31, 2014) loss
of 29 cents per share, excluding a non-cash expense related to
the company's collaboration with CytomX. The company's loss was
at par with the Zacks Consensus Estimate but wider than the
year-ago loss of 2 cents per share.
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ImmunoGen's loss in the reported quarter was 44 cents including
the non-cash expense. Results in the reported quarter were
affected by lower revenues.
ImmunoGen's revenues in the third quarter fiscal 2014 declined
72.5% year over year to $6.9 million. The massive fall in
revenues in the quarter was primarily due to a decrease in
revenues from license and milestone fees. Revenues in the fiscal
third quarter were also well below the Zacks Consensus Estimate
of $13 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 $22.2 million
received in the year-ago quarter.
ImmunoGen's prior-year quarter license and milestone fees
included $11.1 million of amortization of upfront license fees
) for a development and commercialization license. License and
milestone fees during the third quarter fiscal 2013 also included
a $10.5 million milestone payment from
) for the approval of oncology drug Kadcyla in the U.S.
We note that ImmunoGen receives and recognizes royalties on
Kadcyla sales under an agreement with Roche. 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 $2.6 million of royalty payments from Roche
during the third quarter fiscal 2014 for sales of Kadcyla in the
fourth quarter of calendar year 2013.
ImmunoGen's research and development support fees in the third
quarter of fiscal 2014 were down 13.7% to $1.9 million. The
company also recorded $2.1 million of clinical materials revenue
during the quarter compared with $0.7 million in the year-ago
The company's total operating expenses increased 68.4% to $44.3
million. ImmunoGen reported research and development (R&D)
expenses of $38.3 million during the quarter, up 79.6% year over
year. The increase in R&D expenses was primarily due to a
non-cash expense related to the company's collaboration with
CytomX in Jan 2014. General and administrative expenses in the
reported quarter increased 20.9% to $5.4 million.
Fiscal 2014 Outlook
Apart from releasing its financial results, ImmunoGen also
updated its guidance for fiscal 2014. The company lowered its
revenue guidance for fiscal 2014 to the range of $60-$64 million
from the previous guidance range of $71-$75 million. The Zacks
Consensus Estimate of $74 million is well above the company's
ImmunoGen also widened its net loss guidance to $71−$75 million
from $67−$71 million. Operating expense for fiscal 2014 is now
expected in the band of $133 million and $137 million, down from
the previous range of $140−$144 million.
ImmunoGen's third quarter fiscal 2014 results were disappointing
and the company's new guidance also disappointed expectations.
However, the company has multiple pipeline related events in the
coming quarters and we expect investors focus to remain on these
events. We are also encouraged by ImmunoGen's alliances with big
ImmunoGen presently carries a Zacks Rank #2 (Buy). Some other
stocks worth considering include Zacks Ranked #1 (Strong Buy)
Questcor Pharmaceuticals, Inc.