ImmunoGen, Inc. (NASDAQ:IMGN)

CAPS Rating: 4 out of 5

The Company develops antibody-based anticancer therapeutics.

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Player Avatar NetscribeHealthC (37.35) Submitted: 2/14/2007 4:52:42 AM : Underperform Start Price: $5.20 IMGN Score: -59.24

ImmunoGen develops therapeutics for the treatment of cancer. The company’s tumor-activated prodrug (TAP) technology uses antibodies to deliver a potent cytotoxic agent specifically to treat cancer cells. Its collaborative partners include Amgen, Biogen Idec, Centocor, Sanofi-Aventis, Genentech and Millennium Pharmaceuticals. It owns 46 patents issued in the US and over 46 pending US patent applications covering the company's proprietary design, synthesis, development and manufacturing of monoclonal antibody (Mab) drug conjugate therapeutics.

The pharmaceutical industry is entering a potential crisis period wherein the expiry of blockbuster drugs threatens to outstrip the industry's capabilities of generating new therapeutics that can command the pricing required to maintain both infrastructure assets and growth. The cancer Mab therapeutics segment is growing at yearly rate of 40%. ImmunoGen’s strength lies in its intellectual property across multiple therapeutic cancer targets to provide improved Mab-based therapeutics.

The company’s phase II product candidate includes HuN901-DM1 for the treatment of CD56-expressing cancers and phase I product candidates comprise HuC242-DM4 for the treatment of CanAg-expressing cancers, AVE9633 for the treatment of acute myeloid leukemia, and Trastuzumab-DM1 for the treatment of metastatic breast cancers. All these products are not expected to see a commercial launch before 2009, thus, attracting significant research expenditure in near future.

For the six months ended December 2006, revenues increased by 38% reflecting a 90% increase in license and milestone fees, while research and development support revenue grew 10%. Despite increase in revenues net loss worsened by 13% due to 26% rise in total operating expenses. Since the current near-term products continue to remain in early stages of development, the company is not expected to see a significant growth until fiscal 2009 making it less favorable investment proposition.

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