Pipeline setbacks can be devastating for small-cap biotech stocks. ImmunoGen (NASDAQ: IMGN) investors know this firsthand. The biotech's share price crashed earlier this year after it announced disappointing results from a late-stage study of experimental ovarian cancer drug mirvetuximab soravtansine, and the stock hasn't recovered.
But ImmunoGen announced its third-quarter results before the market opened on Friday, providing some good news for investors. Here are the highlights from the company's Q3 update.
By the numbers
Third-quarter revenue was $13.3 million, up from $10.9 million in the same quarter of the previous year. This result was also higher than the average analysts' revenue estimate of $9.9 million.
The company reported a net loss in the third quarter of $21.8 million, or $0.15 per share, based on generally accepted accounting principles (GAAP). This represented an improvement from the net loss of $46.8 million, or $0.32 per share, reported in the prior-year period. Wall Street analysts estimated that ImmunoGen would post an adjusted net loss of $0.18 per share in the quarter.
It ended the third quarter with cash, cash equivalents, and short-term investments of $204.5 million. This reflected a decrease from the $262.3 million on hand as of Dec. 31, 2018.
Behind the numbers
No one expected a sizzling financial performance in Q3 since the company doesn't have any of its own products on the market yet. Revenue stemmed almost entirely from non-cash royalties.
After the major clinical setback for mirvetuximab soravtansine, the company restructured its operations, including cutting staff and scaling back third-party research. This helped reduce its overall operating expenses in the third quarter significantly, narrowing its net loss.
ImmunoGen's cash position is the most important financial metric in its Q3 results. The company is managing its cash relatively well. It also benefited from the sale of its residual rights to Kadcyla royalties earlier this year for net proceeds of $65.2 million.
ImmunoGen projects revenue between $65 million and $70 million for full-year 2019. The company thinks that operating expenses will come in between $170 million and $175 million. It also projects that it will have cash and cash equivalents between $170 million and $175 million at the end of 2019.
Probably the most important thing for investors to watch is ImmunoGen's Mirasol phase 3 study evaluating mirvetuximab in treating platinum-resistant ovarian cancer patients whose tumors express high levels of folate receptor alpha. The biotech hopes to soon enroll the first patient in this study. CEO Mark Enyedy said the company thinks that it has "increased the likelihood of a positive outcome with this next study."
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