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Will ImmunoGen (IMGN) Disappoint Again on Q4 Earnings?
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ImmunoGen, Inc. is scheduled to report its fourth-quarter fiscal 2016 results on Aug 4, before the opening bell. ImmunoGen’s track record has been disappointing with the company consistently missing expectations in all of the four reported quarters. Overall, the company has posted an average negative miss of 14.18%.
In the last reported quarter, ImmunoGen recorded a negative surprise of 23.33%. Will ImmunoGen disappoint again? Let’s see how things are shaping up for this quarter.
Factors at Play
ImmunoGen, a development-stage biotech company, is focused on the development of targeted anticancer therapeutics using its antibody-drug conjugate (ADC) technology. At the time of announcing third-quarter fiscal 2016 results, the company had updated its guidance for fiscal 2016. The company expects revenues in the range of $60–$70 million (previous projection: $70–$80 million). The revised guidance included the effect of changes in the expected timing of partner events.
Net loss is projected in the range of $135–$140 million (old guidance: $120–$125 million) for fiscal 2016. On the other hand, cash and cash equivalents (as of Jun 30, 2016) are expected to be between $155 million and $160 million (old guidance: $165 million to $170 million), reflecting the cash impact of less partner upfront and milestone payments.
We note that ImmunoGen earns revenues in the form of license and milestone fees, royalties, clinical materials revenue and research and development support fees paid by partners that use its ADC technology. The company has partnership agreements with several big health care companies such as Bayer AG (BAYRY - Free Report) and Roche Holding AG (RHHBY - Free Report) among others.
Operating expenses are expected in the range of $180 million to $185 million (previous projection: $175 million to $180 million), reflecting greater clinical trial costs among other things.
Given that ImmunoGen does not have any approved product in its portfolio yet, investor focus should remain on the company’s progress with its lead pipeline candidate, mirvetuximab soravtansine and other programs.
During the quarter (May 2016), ImmunoGen announced data from a 46-patient phase I cohort evaluating the efficacy and safety of mirvetuximab soravtansine as a single-agent therapy for platinum-resistant, FRα-positive ovarian cancer. The company plans to initiate a phase III study (FORWARD I) on mirvetuximab soravtansine, pending discussions with the FDA. The candidate is also in phase Ib/II development in combination with other regimens for the treatment of ovarian cancer.
What Our Model Indicates
Our proven model does not conclusively show that ImmunoGen is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is pegged at 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of 41 cents per share.
Zacks Rank: ImmunoGen currently has a Zacks Rank #4 (Sell). As it is, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Here is a health care stock that you may want to consider instead, as our model shows that it has the right combination of elements to post an earnings beat this quarter:
BioMarin Pharmaceutical Inc. (BMRN - Free Report) has an Earnings ESP of +4.00% and carries a Zacks Rank #3. It is also scheduled to report second-quarter results on Aug 4.
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Will ImmunoGen (IMGN) Disappoint Again on Q4 Earnings?
ImmunoGen, Inc. is scheduled to report its fourth-quarter fiscal 2016 results on Aug 4, before the opening bell. ImmunoGen’s track record has been disappointing with the company consistently missing expectations in all of the four reported quarters. Overall, the company has posted an average negative miss of 14.18%.
In the last reported quarter, ImmunoGen recorded a negative surprise of 23.33%. Will ImmunoGen disappoint again? Let’s see how things are shaping up for this quarter.
Factors at Play
ImmunoGen, a development-stage biotech company, is focused on the development of targeted anticancer therapeutics using its antibody-drug conjugate (ADC) technology. At the time of announcing third-quarter fiscal 2016 results, the company had updated its guidance for fiscal 2016. The company expects revenues in the range of $60–$70 million (previous projection: $70–$80 million). The revised guidance included the effect of changes in the expected timing of partner events.
Net loss is projected in the range of $135–$140 million (old guidance: $120–$125 million) for fiscal 2016. On the other hand, cash and cash equivalents (as of Jun 30, 2016) are expected to be between $155 million and $160 million (old guidance: $165 million to $170 million), reflecting the cash impact of less partner upfront and milestone payments.
We note that ImmunoGen earns revenues in the form of license and milestone fees, royalties, clinical materials revenue and research and development support fees paid by partners that use its ADC technology. The company has partnership agreements with several big health care companies such as Bayer AG (BAYRY - Free Report) and Roche Holding AG (RHHBY - Free Report) among others.
Operating expenses are expected in the range of $180 million to $185 million (previous projection: $175 million to $180 million), reflecting greater clinical trial costs among other things.
Given that ImmunoGen does not have any approved product in its portfolio yet, investor focus should remain on the company’s progress with its lead pipeline candidate, mirvetuximab soravtansine and other programs.
During the quarter (May 2016), ImmunoGen announced data from a 46-patient phase I cohort evaluating the efficacy and safety of mirvetuximab soravtansine as a single-agent therapy for platinum-resistant, FRα-positive ovarian cancer. The company plans to initiate a phase III study (FORWARD I) on mirvetuximab soravtansine, pending discussions with the FDA. The candidate is also in phase Ib/II development in combination with other regimens for the treatment of ovarian cancer.
What Our Model Indicates
Our proven model does not conclusively show that ImmunoGen is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is pegged at 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of 41 cents per share.
Zacks Rank: ImmunoGen currently has a Zacks Rank #4 (Sell). As it is, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
IMMUNOGEN INC Price and EPS Surprise
IMMUNOGEN INC Price and EPS Surprise | IMMUNOGEN INC Quote
A Stock That Warrants a Look
Here is a health care stock that you may want to consider instead, as our model shows that it has the right combination of elements to post an earnings beat this quarter:
BioMarin Pharmaceutical Inc. (BMRN - Free Report) has an Earnings ESP of +4.00% and carries a Zacks Rank #3. It is also scheduled to report second-quarter results on Aug 4.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>