Buy ImmunoGen On Transformational Products, Jefferies Says

• The share price of ImmunoGen, Inc. IMGN has surged 130.49 percent year-to-date, from $6.10 on December 31, 2014.
• Jefferies’ Biren Amin has reinitiated coverage of the company with a Buy rating and price target of $16.
• Since the company began partnering Kadcyla royalties for upfront cash, ImmunoGen has increased its internal development efforts, while Mirvetuximab has begun to show promising early data.

Analyst Biren Amin believes that new products could transform the company and mentioned that while big pharma collaborations were “providing proof-of-concept for the ADC technology and acting as a non-dilutive means of mitigating IMGN cash burn,” “the real value to IMGN” lay in its internally developed asset.

There are signs of “robust activity” with Mirvetuximab among ovarian cancer patients who have high expressed folate receptor levels. Additional data for the drug is expected in 2Q16, which could prove to be the next driver for the stock.

Amin believes that Mirvetuximab could be approved for use in metastatic ovarian cancer by 2021 and achieve U.S sales of $525 million by 2028.

According to the Jefferies report, “IMGN's core Antibody-Drug Conjugate (ADC) technology enhances the potency of antibody/targeted chemotherapeutics by adding cytotoxic payloads.”

The first ADC to be approved is Kadcyla, from which ImmunoGen receives single digit royalties. However, for the near-term, the company has partnered the royalties in exchange for upfront cash worth $200 million.