ImmunoGen, Inc. Reports Third Quarter Fiscal Year 2008 Financial Results

Business Wire,  May 1, 2008  

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Highlights Continued Progress with Numerous Clinical Anticancer Compounds

WALTHAM, Mass. -- ImmunoGen, Inc. (Nasdaq: IMGN), a biopharmaceutical company that develops targeted anticancer therapeutics using its Tumor-Activated Prodrug (TAP) technology, today announced financial results for the three-month period ended March 31, 2008 - the third quarter of the Company's 2008 fiscal year.

"The progress being made by us and by our partners makes it plain that ImmunoGen is entering a new era," commented Mitchel Sayare, Chairman and CEO. "Our collaborator Genentech now expects to make its decision in 2008 about advancing trastuzumab-DM1 into Phase III testing. We made refinements to our IMGN901 and IMGN242 clinical programs and expect to determine the next steps with both of these compounds by the end of 2008. Sanofi-aventis is continuing to make good progress with the three compounds already in clinical testing through our collaboration and with the additional compounds behind these in development. Biogen Idec and Biotest have submitted INDs for their BIIB015 and BT-062 TAP compounds, respectively, and we remain on track to submit the IND for our IMGN388 TAP compound during this quarter. We expect nine compounds to be in clinical testing - in at least sixteen trials - this summer through our own programs and those of our collaborators."

Financial Results

For the three-month period ended March 31, 2008, ImmunoGen reported a net loss of $12.8 million, or $0.30 per basic and diluted share, compared to a net loss of $5.2 million, or $0.12 per basic and diluted share, for the same period last year.

Revenues for the three-month period ended March 31, 2008 were $14.6 million, compared to $9.8 million for the same quarter last year. Third quarter fiscal 2008 revenues include $3.5 million of research and development support fees, compared to $6.6 million for the same period last year. Research and development support fees primarily represent funding earned pursuant to ImmunoGen's discovery, development, and commercialization collaboration with sanofi-aventis and, to a lesser extent, funding earned under the Company's development and license agreements with other of its collaborative partners. The fifth and final contract year with sanofi-aventis began in September 2007 and provides for reduced research and development support fees compared with the fourth contract year as more development activity is assumed by sanofi-aventis. Third quarter fiscal 2008 revenues also include $5.2 million of license and milestone fees, compared to $1.5 million for the same quarter last year. Included in license and milestone fees for the third quarter of fiscal 2008 is a $1.5 million milestone related to the submission by Biogen Idec of the Investigational New Drug (IND) application for BIIB015. Also included in license and milestone fees for the third quarter of fiscal 2008 is a $2.0 million milestone related to the initiation of Phase II clinical testing of trastuzumab-DM1 by Genentech. ImmunoGen received a $5.0 million payment from Genentech with this event in the first quarter of fiscal 2008, $3.0 million of which was recognized as revenue at that time and $2.0 million of which was deferred because it was contingent upon a future event. That event occurred in the third quarter of fiscal 2008. Third quarter fiscal 2008 revenues include $5.8 million of clinical material reimbursement, compared to $1.8 million for the same quarter last year. ImmunoGen manufactures clinical materials on behalf of its collaborators and supplies its collaborators with the Company's cytotoxic agents in support of their manufacturing and development efforts, and earns clinical material reimbursement revenue with the supply of these materials to those collaborators. The higher clinical material reimbursement revenue for the third quarter of fiscal 2008 compared with the same period in the prior year is primarily due to $4.0 million in revenue recognized from the Company supplying one of its cytotoxic agents to a collaborator.

Operating expenses for the three-month period ended March 31, 2008 were $28.0 million, compared to $15.8 million in the same period last year. The operating expenses in the third quarter of fiscal 2008 include research and development expenses of $14.3 million, compared to $12.0 million for the same quarter last year. The increase in research and development expenses for the quarter ended March 31, 2008 versus the prior-year period is driven primarily by a $2.9 million increase in antibody development and supply costs incurred during the current period. The cost of clinical materials reimbursed was $9.0 million in the quarter ended March 31, 2008, compared to $1.0 million for the same quarter last year. As discussed above, ImmunoGen shipped a substantial quantity of one of its cytotoxic agents to a collaborator. This partly contributed to the significant increase in the cost of clinical materials reimbursed in the current quarter as compared to the same quarter last year. During the quarter ended March 31, 2008, ImmunoGen obtained additional quantities of DM1/DM4 from a contract manufacturing organization. The Company recorded $3.7 million as cost of clinical materials reimbursed to write down this material to its net realizable value and to write off material in excess of currently forecasted demand in accordance with ImmunoGen's inventory policy. This DM1/DM4 was produced by the supplier in conjunction with process scale-up, resulting in more material being produced than is anticipated to be required by the Company and its collaborators in the next twelve months. While the Company has booked a reserve for this excess material, ImmunoGen expects this DM1/DM4 to be used in the production of its own and its collaborators' compounds within the next several years. Third quarter fiscal 2008 operating expenses also include general and administrative expenses of $4.7 million, compared to $2.8 million for the same quarter last year. During the third quarter of fiscal 2008, the Company recognized $0.7 million of expense related to the rental of laboratory and office space in Waltham, MA that the Company occupied in late March 2008, as well as $0.6 million of move-related expenses, classifying such as general and administrative expenses. In addition, patent expenses were higher by $0.4 million over the same quarter of last year due to timing of patent activity.