Cancer treatments are toxic by design, which is why efficiency is key. ImmunoGen, Inc. (Nasdaq: IMGN) aims to maximize its efficiency in treating cancer, by thoroughly researching its compounds in order to better utilize them. Furthermore, it also takes into consideration the toxicity of cancer treatments, which is why it also seeks out safe alternatives. IMGN stock ran 153% on the second of May after its Elehere compound achieved remarkable results in its treatment of ovarian cancer. The stock is currently cruising well above its average price point, but will it continue to soar?
IMGN Stock News
IMGN does not simply focus on developing chemotherapy. It specializes in developing Antibody-drug coagulates (ADC). ADCs are basically targeted cancer treatments that attack tumors while minimizing their damage to healthy cells. They function by providing the body with a drug to combat the tumor and specific antibodies that also target the tumor. The body then conducts a series of physiological reactions that result in the mass production of these antibodies.
The cancer market is vast and expansive. Its estimated size in the US was $265.1 billion in 2020 and is expected to grow by 8.2% by 2030. The market expands as more than a million new cases are reported in the US each year. These patients are usually bombarded with chemo, and radiation in order to halt disease progression, which is why alternatives are at times more appealing. The current global market value for ADC is valued at $2.31 billion and is expected to grow by 16.7% reaching $6.81 billion in 2030.
There are many ADC companies, however, it is considered a key innovator alongside Genentech, Takeda Pharmaceutical Company Limited (NYSE: TAK), and Seagen Inc. (NASDAQ: SGEN). These companies have obtained their prominence in the medical industry by producing ADCs that target a variety of cancers. What sets IMGN apart is its thorough research concerning ovarian cancer.
The ovarian cancer market size was worth 1.54 billion in 2021 and is expected to grow at a rate of 28.8% reaching a total market of around 19.92 billion by 2030. This high growth rate indicates that the market will experience greater demand for ovarian cancer treatments, which is optimal for IMGN.
Mirvetuximab soravtansine-gynx more commonly known as Elehere (IMGN853) is IMGN’s most prominent compound. It contains an antibody that assists in combating ovarian cancer which is attached with a cleavable linker to a maytansinoid, which is a toxic substance that is effective at killing cancerous cells. IMGN853 is currently undergoing 4 FDA trials for ovarian cancer treatment. That being said, the drug was already approved by the FDA in November 2022, due to its Soraya trial, which evaluated the drug’s effect over an extended period.
Soraya patients did not have standard ovarian cancer, they had platinum-resistant ovarian cancer, which is a recurring form of ovarian cancer that is hard to treat. The results of Soraya’s last trial yielded a positive outcome. After a 13.4-month follow-up, 32% of patients exhibited an anticancer response, five of which experienced complete remission.
Due to the Soraya trial, IMGN853 is on the market and is currently being used to treat ovarian cancer commercially. That being said, the IMGN853 FDA trials for ovarian cancer are not over yet. Next up on the docket is the Mirasol Trial, which was a comparative study that contrasted the effects of IMGN853 with the effects of chemo-based platinum-resistant ovarian cancer treatments like paclitaxel. During the study, it became clear that IMGN853 may be more effective than its more traditional compatriots. IMGN853’s median for overall survival (OS) was 16.46 months, the other treatments in the study had a median OS of 12.75. These results represent a 33% risk reduction in death when compared with the other treatments in the study.
When the Mirasol study results were released to the public the stock ran 156%. It’s also safe to assume that the drug’s popularity will increase, which means more sales and stronger financials moving forward due to increased revenue.
Both the Mirasol and Soraya trials monitored the patients for a long period in order to more accurately assess remission and survivability rates. Due to the nature of cancer, longer results are more favorable. The next IMGN853 trial results to be released will probably be the Piccolo results. The study’s estimated completion date is December 31, 2024. Most of the other trials in IMGN’s pipeline also are not set for completion anytime soon. A longer wait between results translates to a longer wait between potential catalysts, which may affect the stock negatively.
Currently, IMGN is pursuing a medical authorization application (MAA), and (sBLA), which would assist it in the distribution of its treatments. The MAA will give IMGN access to the EU market as well as the markets of Iceland, Norway, and Liechtenstein. The European Medical Agency (EMA) will probably take around 210 days to reach a consensus. On the other hand, an sBLA is a necessary procedural step towards pharmaceutical interstate commerce, which would also drastically expand IMGN’s reach in the US. If IMGN receives both MAA and sBLA approval, then its finances may drastically improve as a result.
IMGN has recently announced a public offering where the company is offering 26 million shares for $12.50 each. The offering will close by May 9th. The funds accumulated by this offering will go towards global commercialization efforts and research funding. Both of which are critical in the growth of IMGN stock.
IMGN Stock Financials
According to IMGN’s Q1 earnings report, IMGN’s assets decreased from $348 million at the end of Q4 2022, to $288 million in Q1 2023. Liabilities mirrored assets due to shareholder equity, meaning that liabilities also decreased.
Its current cash balance at the end of Q1 2023 was approximately $201 million, which is lower than its Q4 2022 balance of $275 million. Its lower balance correlates with IMGNs increasing expenses. At the end of Q4 2022 its expenses were $60.9 million, however during Q1 2023 its expenses rose substantially to $92 million. Despite these negative figures, the most notable difference between both quarters is a positive. IMGN started generating product revenue in Q1 2023. It generated 29.5 million dollars in product revenue, which is a promising sign for IMGN. That being said, net loss increased from $24 million in Q4 2022 to $41 million in 2023, despite the recent inclusion of product-based revenue.
It is highly probable that its financials will improve given the Mirasol study results, and its attempts to introduce its treatments to more markets domestically and around the world.
@johnfheerdinkjr lists the reasons why he believes IMNG583 is superior to traditional Chemo.
@Pharmdca discussing the strategic nature of IMGN’s offering.
IMGN is in a neutral trend in a sideways channel above the 200 MA. The stock is currently far above all of the MA’s, however Its RSI is overbought, and the MACD is reaching a bearish crossover.
Despite the bearish indicators, IMGN’s fundamentals are very bullish. It recently started generating product revenue, and is tirelessly working on expanding its market share. Furthermore, IMGN853 is an extremely efficient ovarian cancer treatment, which means it’s likely going to experience a high rate of demand as it extends its reach.
A possible play could be to go long when the stock retests its 11.69 trend line support due to dilution, and TP When the MAA process is approved, and when new trial results come in April 2024 (IMGC 936) December 2024 (Piccolo ), and December 2025 (IMGN151)
IMGN Stock Forecast
At first glance, IMGN’s potential may not be apparent, because it just recently started generating revenue. That being said due to the expanding nature of the ovarian cancer market, and the efficiency of IMGN853 IMGN is likely to experience substantial growth, especially if its MAA and sBLA are approved.
As IMGN generates more revenue due to IMGN853, dilutions due to public offerings become less likely. Furthermore, as revenues pile up, IMGN will probably experience positive catalysts due to promising earnings reports further improving the stock’s overall value.
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