I've been saying all along I expected it early, but frankly it came later than I thought it would. It appears that the good news was largely already priced into the stock, so for now we probably won't see new 52 week highs.
The really big news in the announcement was that the drug would be available in 2 weeks or less, when have you ever seen a drug available so quickly. IMGN did get $10.5 million in a milestone payment for achieving this, so nearly $20 million remains off the top of my head for achieving sales milestones. I would expect the highest of the annual milestones to be knocked out by about 2015 as sales exceed $3 billion annually by then.
While it might be awhile before we're seeing new 52 week highs, I believe we'll end the year close to the high, and each succeeding year will go higher for the time we're to be paid for T-DM1 sales, 12 years as I understand it. By then, I believe other drugs will have far greater influence on IMGN's price as some approved drugs will be wholly owned by IMGN, others will be from partners who are paying dramatically higher royalties, or where IMGN owns a portion of the drug. For now, each billion T-DM1 earns will earn IMGN $40+ million which should go into the hundreds of millions in a year or so and total roughly half a billion annually in the next 4 to 6 years if I'm right about T-DM1 eventually replacing Herceptin and expanding on it in virtually every application.
It's been a much longer road then most of us thought it would be, but now IMGN's success should be assured, we just need to see how big it will be as other drugs advance and are approved. Any of the drugs in IMGN's arsenal can potentially bring them more than T-DM1 will, but when T-DM1 sales provide hundreds of millions annually to IMGN, it ought to bring prices that are multiples of today's prices.
Gary |
