ImmunoGen fourth-quarter 2010 net loss increases to $13.4 million

ImmunoGen, Inc.Aug 5 2010

ImmunoGen, Inc. (Nasdaq: IMGN), a biotechnology company that develops targeted anticancer products using its antibody expertise and Targeted Antibody Payload (TAP) technology, today announced financial results for the three-month period and fiscal year ended June 30, 2010.

“In the near term, we expect most of this cash inflow to be from upfront and milestone payments, with the potential for us to begin receiving royalty payments in the later part of our 2011 fiscal year.”

"We're starting our new fiscal year with ImmunoGen in a very strong position," commented Daniel Junius, President and CEO. "The first marketing application for an anticancer compound using our TAP technology - T-DM1 - is at the FDA. We're aggressively advancing our own product candidates, with our third compound on track to enter the clinic in 2011. Five clinical-stage product candidates are moving forward through our collaborative partners with another expected to enter the clinic in 2010 and up to three more expected in the clinic in 2011. We have a solid management team and a strong balance sheet, and are seeing a whole new level of interest in our technology by other companies."

Product Pipeline Highlights

Trastuzumab-DM1 (T-DM1) - in development by Roche for treatment of advanced HER2+ breast cancer (BC)

• Marketing application submitted in July 2010 to US FDA for treatment of advanced HER2+ BC previously treated with multiple HER2-targeted medicines and chemotherapies. Roche is seeking accelerated approval for this marketing application.
• Phase III MARIANNE trial initiated in July 2010 assessing T-DM1 for 1^st-line treatment of advanced HER2+ BC.
• Preliminary data from Phase II study assessing T-DM1 for 1^st-line treatment of advanced HER2+ BC have been accepted for presentation at ESMO in October 2010.
• Over 185 clinical sites are now participating in the Phase III EMILIA trial assessing T-DM1 for 2^nd-line treatment of advanced HER2+ BC.
• Additional data from trial assessing T-DM1 used with pertuzumab have been submitted for presentation at SABCS in December 2010.

Lorvotuzumab mertansine (IMGN901) - in development by ImmunoGen for treatment of CD56+ solid tumors and multiple myeloma

• Updated clinical data have been accepted for presentation at ESMO in October 2010 from a trial assessing this compound for the treatment of advanced small-cell lung cancer (SCLC), Merkel cell carcinoma (MCC) and ovarian cancer.
• Trial assessing this compound for 1^st-line treatment of SCLC is on track to be initiated by late 2010. Orphan drug status for SCLC has been applied for in the US and Europe.
• A go/no go decision on the initiation of a pivotal trial in MCC is expected to be made by ImmunoGen by the end of 2010. Orphan drug status for MCC has been granted in the US and Europe.
• Updated clinical data from one or both of the ongoing trials assessing the compound for multiple myeloma are expected to be submitted for presentation at ASH in December 2010.

SAR3419 - in development by sanofi-aventis for treatment of non-Hodgkin's lymphoma

• Impressive results have been seen in the Phase I weekly dosing study and the "go" decision has been made to advance SAR3419 into Phase II. This testing is expected to start in 2H2011, with the Phase I data reported at ASH in 2011.

IMGN388 - in development by ImmunoGen for treatment of solid tumors

• Updated Phase I clinical findings with IMGN388 have been accepted for presentation at the EORTC-NCI-AACR meeting in November 2010. Dose-escalation has been completed in the part of this study assessing dosing IMGN388 every three weeks.

Other ImmunoGen Compounds

• ImmunoGen expects to submit an IND for the Company's third compound, IMGN529, in 2011 and one for its fourth compound in 2012. These are both TAP compounds.

Other Partner Compounds

• BT-062 and BIIB015 continue to progress in Phase I testing, and ImmunoGen expects that clinical data could be reported for one or both of these compounds in late 2010.
• SAR650984 advanced into clinical testing in June 2010 through the Company's collaboration with sanofi-aventis. ImmunoGen expects another compound to enter the clinic in 2010 through this collaboration.
• ImmunoGen expects 2-3 additional compounds to enter the clinic in 2011 through the Company's collaborative partners.

Financial Results

ImmunoGen reported a net loss of $13.4 million, or $0.21 per basic and diluted share, for the three-month period ended June 30, 2010, compared to a net loss of $10.8 million, or $0.21 per basic and diluted share, for the same period last year. For the Company's fiscal year ended June 30, 2010 (FY2010), ImmunoGen reported a net loss of $50.9 million, or $0.87 per basic and diluted share, compared to a net loss of $31.9 million, or $0.63 per basic and diluted share, for its fiscal year ended June 30, 2009 (FY2009).

Revenues were $13.9 million in FY2010, compared to $28.0 million in FY2009. Revenues in FY2010 include $5.7 million of license and milestone fees, compared to $15.1 million in FY2009. The FY2010 fees include $2.5 million in milestone payments earned with early-stage product achievements by two collaborative partners. The FY2009 fees include $10.5 million in milestone payments earned with two collaboration compounds moving into more advanced clinical testing, as well as other, smaller, items. Revenues in FY2010 also include $5.4 million of research and development support fees, compared to $7.6 million in FY2009. The FY2009 support fees included the final committed funding earned from sanofi-aventis under a five-year funded research collaboration between the companies. Revenues in FY2010 also include $2.9 million of clinical material reimbursement, compared to $5.3 million in FY2009. The lower amount in FY2010 compared with FY2009 is primarily because more clinical material batches were released in FY2009 than in FY2010.

Operating expenses in FY2010 were $65.2 million, compared to $59.8 million in FY2009. Operating expenses in FY2010 include research and development expenses of $50.3 million and general and administrative expenses of $14.9 million, compared to $45.9 million and $13.9 million, respectively, in FY2009. The increase in research and development expenses in FY2010 versus the prior year is primarily due to increased clinical and preclinical costs related to development of ImmunoGen product candidates, increased salary and related expenses driven by additional personnel and greater stock compensation expense, and less manufacturing overhead being allocated to collaborative partners to produce clinical materials on their behalf.

ImmunoGen had approximately $110.3 million in cash and marketable securities as of June 30, 2010 - inclusive of net proceeds of $77.5 million raised in May 2010 through the sale of common equity through a public offering - compared with $71.1 million as of June 30, 2009. The Company had no debt outstanding in either period. During FY2010, cash used in operations was $40.6 million, compared to $13.3 million during FY2009. The increase in cash used was driven principally by reduced cash inflow from upfront and milestone payments in FY2010 compared to FY2009, which also contributed to the greater net loss, and by the timing of payment of incentive compensation. Capital expenditures were $1.5 million for FY2010, compared to $1.9 million for FY2009.

Financial Guidance

ImmunoGen expects its net loss for its fiscal year ending June 30, 2011 to be between $50-53 million, its cash used in operations to be between $34-37 million, and its capital expenditures to be between $2-3 million. Cash and marketable securities at June 30, 2011 are anticipated to be between $74-77 million.

"Our guidance for our 2011 fiscal year reflects the increased investment we're making in the aggressive development of our own product pipeline, which is more than offset by the significant increase in the amount of cash we expect to receive from partners," commented Gregory Perry, Senior Vice President and CFO. "In the near term, we expect most of this cash inflow to be from upfront and milestone payments, with the potential for us to begin receiving royalty payments in the later part of our 2011 fiscal year."