Biotechnology has and will continue to be a competitive business full of thousands of companies striving to be the most successful in their respective fields. Many larger companies, such as Biogen, over shadow smaller companies, blocking their sunlight and even their nourishment. Although these neglected companies may look dried out from an outsider’s perspective, with just a little research, one can find the advancing technologies that many of these companies are striving to create. Among these potential companies stands ImmunoGen ($IMGN), which is a rose amongst the fescue in the biotech garden.
By John Coughlin
Company Overview
ImmunoGen ($IMGN) has stood the test of time within the Biotech industry. Founded in 1981, the company specializes in creating antibody drugs that help fight the spread of cancer. ImmunoGen’s antibody-drug conjugates (ADCs), is stated to “improve outcomes for cancer patients.”
With striving to fight the spread of cancer, ImmunoGen has created the motto of “targeting a better now.” This “better now” can best be seen with the company’s commitment to “A therapy that targets cancer cells where they live, not where you live. This drive to fight the spread of cancer within the human body has put the company at the forefront of cancer treatments and will continue to do so in the future.
Financials
The story of ImmunoGen can best be seen within the company’s past three-year performance, especially in its 2018 financial year. ImmunoGen’s worst year, regarding financials, was 2018, in which the company was operating at a net loss of $168 million. Although this number was near devastating to the company, ImmunoGen bounced back within the 2019 financial year and only incurred a $104 million loss. From 2018 to 2019, the company has seen a nearly $30 million jump in revenue, which has continued into 2020. In ImmunoGen’s most recent quarterly report, the company reported a $5 million increase in revenue, and a $14 million improvement in their net loss, from ($43 million) to ($29 million) within Q1 of 2020. If ImmunoGen continues to report revenue improvements, such as the ones seen before, the company could turn a profit within the following years.
Along with the company’s revenue, ImmunoGen’s cash and cash equivalents, which were $176.2 million as of December 31, 2019, has risen to $247.3 within the first quarter of 2020. This increase was due to ImmunoGen selling “24.5 million shares of its common stock.” With this newly acquired cash, the company can easily weather the storm of Covid-19 and pursue further expansion and studies, as seen in Mark Enyedy, CEO of ImmunoGen, statement: “We are in a strong financial position with our anticipated cash runway extended well into 2022.”
Financials, Including Covid-19
The story of 2020, regarding financial markets, is how Covid-19 has affected the economy and what it means for individual companies. Regarding ImmunoGen, the company has continued to perform at its highest level, regardless of the pandemic. Within the company’s Q1 earnings report, Mark Enyedy, ImmunoGen’s President and Chief Executive Officer, remarked they are “adapting to meet the evolving challenges of the COVID-19 pandemic.”
The company is also continuing to improve their trials, SORAYA, a new single-arm study in platinum-resistant ovarian cancer for women. ImmunoGen, in their anticipated events, stated they are continuing to enroll patients in their pivotal SORAYA trials, which is an excellent sign that the pandemic is not interfering in their advancing treatments.
Stock Performance
The company’s stock price has remained stagnant over the past two years. Before 2019, the company was sitting at $10 per share but drastically fell to a low of $2 due the Covid-19 market crash and the company’s trial of mirvetuximab, which failed in early 2019. Although the company’s stock price may look bleak from an outsider’s perspective, ImmunoGen represents a great buy opportunity, roughly pertaining to the future of the company’s revenue.
As I have mentioned in the previous financial section, ImmunoGen is continuing to increase its revenue year over year. Although the company may be improving regarding financials, its stock performance has not resembled their company performance. Year to date, ($IMGN) is down 10%, even though the company has seen a tremendous quarterly report.
If ImmunoGen can continue to increase its revenue year over year, which is likely to occur, then ($IMGN) may be able to return to a price over the $10 mark, representing a 150% price increase.
Mirvetuximab Soravtansine Trials and Studies
Mirvetuximab Soravtansine is, as suggested by ImmunoGen, “a potential new treatment for patients with folate receptor alpha (FRα)-positive cancer.” In the years prior, the company had been advancing in Phase 3 FORWARD I trial and other trials. Still, the treatment fell short of its desired destination, as quoted to “not result in a progression-free survival improvement” Subsequently, ImmunoGen’s stock price fell dramatically, as mirvetuximab is a central treatment to the company.
Although ImmunoGen fell short of their desired treatment with mirvetuximab, SORAYA, their new study, is on the fast track for approval. This new study, which has acquired many patients, may provide a gateway into a new journey for mirvetuximab and further profitable quarters for ImmunoGen.
Company Outlook
ImmunoGen’s future remains bright. In the past years, SORAYA, a new study for women with ovarian cancer, has gained traction and is at the company’s forefront of their agenda. SORAYA is accelerating the approval process for mirvetuximab, a treatment for ovarian cancer, which had initially failed in early 2019. If the company can get mirvetuximab approved in the upcoming years, ImmunoGen’s revenue will skyrocket, as the treatment is their leading study.
With the advancing technology that ImmunoGen is creating, the company is full of potential. From a study and financial perspective, the company is loaded with $247.3 in cash and cash equivalents to push forward their trial agenda and grow as a company.
Rating
ImmunoGen, with its treatment mirvetuximab, provides an investor with a sense of confidence within the Biotech investing atmosphere. With the company having potential in its financials and potential treatments, ImmunoGen is considered a STRONG BUY. ImmunoGen is finally gaining its needed sunlight to flourish within the Biotech garden.
To follow Analyst John Coughlin, go to:
TikTok: Street Signs
Instagram: Stockmarketsigns
What is your track record with picking stocks?