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Will ImmunoGen’s Q4 Earnings Disappoint Again?

July 30, 2014 | About:
Karen Rogers

Karen Rogers

1 followers

ImmunoGen, Inc. (?IMGN) will announce its fourth-quarter earnings and hold its annual fiscal year financial conference before the market opens on Friday, Aug. 1, 2014, at 8:00 a.m. EDT. You can access the live broadcast from the Investor Information site on the company website at www.ImmunoGen.com. Alternatively, you can attend the live conference via telephone by calling 1-913-905-3226 and entering the conference ID number 2600176.

ImmunoGen develops drugs to treat different types of cancer. The company uses its ADC technology, or antibody-drug conjugate, to directly target a specific type of tumor without harming healthy cells.

Analysts Expect:

  • EPS ranging from -$0.44 to -$0.07 with a target of -$0.32
  • Revenue ranging from $6.41 million to $21.59 million with a target of $9.72 million

Key 4th Quarter News

In June 2014, ImmunoGen announced that two drugs in the development stage yielded positive test results. The STARLYTE Phase II trial of SAR3419 effectively treated patients suffering from diffuse large B-cell lymphoma. IMGN779, an experimental drug designed to treat a form of leukemia, selectively killed the cancer-producing cells, but did not affect the healthy cells.

Persistent Weak Financials

Despite the success of breast cancer drug Kadcyla, ImmunoGen continues to post consecutive quarterly losses. The main problem the company faces is that it cannot get its products to the marketplace fast enough. ImmunoGen currently has eight drugs in the Pre-Clinical stage, ten drugs in phase one, one drug in phase two, and three drugs in phase three testing. Once the testing phase is completed, there is no guarantee the FDA will approve any of the drugs for medical use.

At the close of the following fiscal years, the company reported a net loss of $72.811 million for 2013, a net loss of $73.3219 million for 2012, and a net loss of $58.274 million for 2011. The stock lost about 50 percent of its value over 12 months, falling from a high of $20.25 in Aug. 2013 to $10.31 in July 2014.

EPS

Q3 2014

Q2 2014

Q1 2014

Q4 2013

Estimate

-$0.27

-$0.18

-$0.22

-$0.30

Actual

-$0.44

$0.04

-$0.13

-$0.26

Difference

-0.17

+0.22

-0.09

-0.04

Competitors

ImmunoGen faces tough competition against Pfizer, Inc. (?PFE), Bristol-Myers Squibb, Co. (?BMY) and Seattle Genetics, Inc. (?SGEN). Pfizer and Bristol-Myers Squibb are two of the top five pharmaceutical companies as ranked by sales. These two companies consistently report positive revenue and net income while devoting billions of dollars to drug development. Thanks to brisk sales of Adcetris, Seattle Genetics revenue increased 320%, jumping from $45.9 million in Sept. 2012 to 146.9 million in Sept. 2013. Seattle Genetics saw its stock price climb from $32.30 in July 2013 to $55.99 in Feb. 2014.

IMGN

PFE

BMY

SGEN

Share Price

$11.10

$29.16

$50.93

$35.50

Market Cap

$939.7M

$189.4B

$84.6B

$4.3B

Revenue (TTM)

$58.0M

$50.1B

$16.2B

$480.2M

Net Income (TTM)

-$66.74M

$10.99B

$2.69B

-$62.56M

P/E (TTM)

---

18.3

31.4

---

EPS (TTM)

-$0.79

$1.59

$1.62

-$0.51

Analyst Opinion/Trade Considerations

Analysts have been largely disappointed by the frequent larger than expected losses. In June 2014, Morgan Stanley analysts rated ImmunoGen as “Underweight”, or sell, with a target price of $10. So far, the stock has continued the downward slide it started earlier this year in February and is fighting to remain above $10 a share. However, some analysts including UBS believe the worst might be over and have upgraded the stock from sell to neutral or hold. Investors who believe the stock has hit rock bottom should look at their investment as a long-term venture.


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