About a month has gone by since the last earnings report for ImmunoGen, Inc. (IMGN - Free Report) . Shares have added about 17.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
ImmunoGen Second Quarter Loss Narrows, Sales & Cash Outlook Up
ImmunoGen reported a loss of $0.10 per share in the second quarter of 2017, narrower than both the Zacks Consensus Estimate of a loss of $0.14 and the year-ago loss of $0.53.
Since ImmunoGen does not have any approved product in its portfolio yet, the company earns revenues through royalties, license and milestone payments, as well as research and development (R&D) support fees paid by its partners.
Revenues jumped significantly by 427% year over year to $39 million and beat the Zacks Consensus Estimate of $34 million in the reported quarter. This increase in revenues was mainly driven by substantially higher license and milestone fees of $31.1 million compared with the $0.08 million a year ago. This included $30 million paid-up license fee related to a licensing agreement with Sanofi and $1 million phase I milestone payment from the collaboration agreement with CytomX Therapeutics.
Research & development (R&D) expenses decreased 8.6% from the year-ago level to $35.3 million. This decline was primarily due to workforce reduction, decreased clinical trial costs because of IMGN529 studies winding down. Selling, general and administrative (SG&A) expenses declined 5.4% to $8.8 million due to decreased personnel expenses in the second quarter of 2017.
ImmunoGen’s cash and cash equivalents at the end of Jun 2017 were $150.3 million compared with $126.6 million as of Dec 2016. The company expects to use its current cash and expected cash to fund operations in the second quarter of 2018.
The company increased its revenue and cash guidance for 2017. Revenues are now expected in the range of $115-$120 million compared with $70–$75 million projected previously. On the other hand, cash and cash equivalents are expected between $90-$95 million as of Dec 31, 2017, much higher than the earlier estimates of $35-$40 million. The increase in cash and revenue guidance was mainly due to an upfront payment of $25 million which the company received from Debiopharm. The company will likely recognize it as revenue, later this year. The collaboration agreement with Sanofi also contributed to the company’s increased expectation for the cash position.
The company continues to project operating expenses in the range of $175–$180 million for 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last month as none of them issued any earnings estimate revisions.
At this time, ImmunoGen's stock has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable for both growth and momentum investors based on our style scores.
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.