I believe IMGN is a great investment at this point. Look at the pipeline, 4 of their wholly owned drugs in the clinic, 10 additional from their partners. Four of these drugs will be in Pivotal or Registrational Trials this year, and I believe 7 are in Phase 2. Last report they had over $200 million in the bank, over $2 a share.
I believe that IMGN welcome comparison with SGEN which historically traded for double to 4 times IMGN's market cap. Look at the pipelines and both successes and failures and I believe you'll find the historical figures justified. Now look at their market caps. Even with substantial recent losses by SGEN due to a trial halt, their market cap is roughly 40 times that of IMGN.
I believe that the losses in 2016 were greatly overdone as while it may take longer to get IMGN853 through the Phase 3 trial that's begun recruiting, if approved the FDA label should be far more inclusive than it would have been had the done a registrational Phase 2. Yes, the data grew weaker, so they abandoned the idea of a registrational Phase 2, but they now have a better understanding of the drug and I believe they'll not only have success in the Phase 3, they'll also find even greater efficacy in combination trials being run as well that will report while Phase 3 is being run.
Long term what could be even more important for IMGN is the IGN drugs, the first of which are entering the clinic. Their IGN's are thought to have advantage over the DMx based drugs, but how great the advantage may be can only be determined in the clinic, and early results ought to tell us something by late this year or early next. If this technology proves superior in all applications, perhaps even an approved drug, like Kadcyla, will be reformulated and tested, that would constitute a new partnerships on terms that would be far better than what IMGN got when they originally conjugated Herceptin with DM1 to form an early version of what evolved into Kadcyla. Had IMGN not monetized Kadcyla they would almost certainly be bringing in many millions quarterly, but they did, so for a couple more years they're seeing no royalty payments.
Gary |
