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Biotech / Medical : ImmunoGen -- Ignore unavailable to you. Want to Upgrade?

To: TI2, TechInvestorToo who wrote (3788)	12/30/2000 4:09:46 PM
From: TI2, TechInvestorToo	Read Replies (1) \| Respond to of 5665

Text of CEO’s Message It has been a little over two months since I've provided an update on ImmunoGen. A lot has happened in that interval and I'm happy to bring you up to date. Clinical trials of our first product, huC242-DM1/SB-408075, are moving along rapidly. The IND application to begin clinical trials in the U.S. on our second product, huN901-DM1/BB-10901, was filed with FDA by our partner, British Biotech, just a few days ago. We raised over $130 million in a recent financing. And our searches for a CFO and Director of Investor Relations are coming to a close. Together with our partner, GlaxoSmithKline (GSK), we are dosing a large number of patients in two Phase I/II clinical studies on huC242-DM1/SB-408075, our product for treatment of colorectal, pancreatic and most non-small-cell lung cancers. To participate in the study, all patients must be be diagnosed with relapsed disease, must have failed 5-fluorouracil (the drug most commonly used to treat colorectal cancer), and must meet certain minimum performance standards. In reality, nearly all patients have failed a number of treatment regimens, are refractory to any further therapy, and have metastatic disease (meaning that their disease has spread beyond the organ in which the primary tumor resides). The first study, begun about a year ago in San Antonio with Drs. Anthony Tolcher and Eric Rowinski, is continuing. For details about the design of this safety study, the dosing regimen, the escalation schedule and so forth, please refer to my last update message. Preliminary data on the first twenty patients in the study were presented last month at a medical conference in Amsterdam. The data, reported by Dr. Tolcher, showed only modest toxicity at even the highest reported dosage level, 235 mg/m2. None of the twenty patients showed any evidence of an immune response against huC242-DM1/SB-408075. In about two-thirds of patients suffering from colorectal cancer, measurable levels of carcinoembryonic antigen (CEA) can be found in the blood. Although the absolute amount of CEA is not thought to be important, the upward or downward trend in CEA level in a given patient is commonly used as a tool to track tumor status. For example, all of the patients in our studies who had measurable amounts of CEA in their blood (about two-thirds) had a history of increasing levels. As reported in Amsterdam, all of the patients who were treated at 176 mg/m2 and above and who had measurable CEA levels, showed a downward trend in CEA after treatment, despite presenting with an upward trend. Although this isn't a direct measure of tumor response, it is considered very encouraging by clinicians. No further efficacy information was presented at Amsterdam, and in agreement with our partner, we will not disclose further efficacy information until appropriate. We expect that more data on this study will be reported at the American Society of Clinical Oncology meeting in the spring. The multi-dose clinical study at the University of Chicago Cancer Research Center, under the direction of Dr. Richard Schilsky, is progressing well. The weekly dosage has been escalated several times, and escalation continues as planned in the protocol. I'll provide more updates on this study as the data emerge. We have made excellent progress in the preclinical development of our second product, huN901-DM1/BB-10901, designed to treat small-cell lung cancer. Our partner, British Biotech, filed an IND application to begin clinical trials of the product in just the last few days. Much of the data included in that application was generated by ImmunoGen, and its timely submission is a tribute to both our development team and to British Biotech's regulatory strengths. As you may have heard, we recently sold 4 million shares of ImmunoGen common stock at $33 per share to institutional investors in an underwritten public offering. This brings total cash on the balance sheet to over $150 million and has had a dramatic impact on our planning for the next several years. Let me explain how. ImmunoGen's future is closely tied to the use of our tumor-activated prodrug (TAP) technology platform in products that we can develop with our internal resources. We call these pipeline products. huC242-DM1 was at one time a pipeline product. It no longer is because we licensed the worldwide rights to the product to GSK. Although we will get a nice royalty from GSK on their sales of the product after approval, and although we have already gotten $14 million in cash from them toward a total milestone package of $41.5 million, our return is not the same as if we had held on to the rights to the product at least through Phase II clinical studies. After all, we negotiated the agreement with GSK when the product was nearly a year away from clinical trials, and we had almost no cash. The situation at ImmunoGen is much different now. We can afford to hold on to products through Phase II, and we can then negotiate much more lucrative deals. For example, it is not unusual to see large pharmaceutical companies pay royalties in the range of 30 to 40% on products that have shown robust efficacy in Phase II. But where will those products come from? For the most part, they are TAPs derived from antibodies that we or others prepare against cancer targets and push through our pipeline. It is these targets that represent the input to our pipeline. Having the additional cash that our recent financing provided offers us much more opportunity to find and purchase validated targets to develop into products. We can afford to fund clinical development now, and therefore make choices that can potentially yield huge long term return. Up until this financing, our plan was to continue to roll out the TAP platform to other companies, as we have with Genentech and Abgenix, to create the cash flow we needed to fund our pipeline. The diameter of that pipeline was narrow—we needed to restrict the number of new targets we put through since our cash resources were limited. This has changed now. We can afford to widen the pipeline and put more targets through. And although we will continue to roll out the platform to other companies, we are no longer completely reliant on cash flow from these deals to pay for our pipeline development. We continue to search for talent to join the ImmunoGen team. Virginia Lavery recently joined us as Senior Controller and brings with her a wealth of public accounting and company experience. Our searches for a CFO and for a Director of Investor Relations are maturing. I hope that by the time of my next report here, I'll be able to announce their hiring. It has been a great couple of months for the Company. Certainly we've never been in as strong a financial position—in addition to the financing, we just received a $2 million payment from Abgenix as part of their technology access fee. We have never had as many product opportunities, and have never seen preclinical and clinical data as promising as those we are developing now. We are now covered by five sell-side analysts, all of whom have very high ratings on ImmunoGen and we're working hard at trying to build investor confidence in our future. In fact, I'm confident that 2001 will be a very good year. GLPAL TI2