Immunogen: Favoring the Bulls

Last Updated on May 2, 2020 by Chris Stang

Immunogen (IMGN) is a small cap biotechnology company that specializes in antibody drug conjugates (ADCs). ADCs combine the precision of a monoclonal antibody with a payload of chemotherapy. The goal here is to target the cancer cells with the antibody, getting high concentrations of the chemotherapy where the tumor is and avoid the chemotherapy causing side effects in non-cancerous areas. The development of ADCs has been wildly successful for several companies such as Seattle Genetics (SGEN) and Immunomedics (IMMU).

Immunogen’s lead candidate is mirvetuximab soravtansine. This ADC uses the antibody to target the folate receptor alpha, which Immunogen believes will be beneficial in the treatment of ovarian cancer. Intuitively, this drug candidate appears to work best in cancers that express higher levels of the folate receptor alpha. Unfortunately, Immunogen ran into issues with the prior registrational trial called Forward I. This trial did not met its primary endpoints for a couple of reasons. These include allowing patients with medium and high expression of the folate receptor alpha be enrolled, the way in which they measured the folate receptor alpha expression, and the statistical design.

Now, Immunogen has developed a plan for mirvetuximab soravtansine’s development, which has received the blessing of the FDA. First, they will conduct the SORAYA trial in folate receptor high, platinum resistant ovarian cancer, which has a dismal prognosis at present time. This could lend to accelerated approval for mirvetuximab soravtansine. In accordance with typical FDA regulations and the EMA’s guidance, a second trial called MIRASOL could lead to full approval in the United States and for potential approval in Europe.

The single arm SORAYA trial has been initiated and is recruiting, with expected data readout in mid-2021. If positive, Immunogen anticipates filing a biologic license application (BLA) in the second half of 2021. Additionally, the MIRASOL trial has been initiated and is also enrolling patients, with an estimated readout in the first half of 2022, with full approval being granted in 2023 if positive. While these events may seem far off, there are additional items to note that will play as catalysts.

Most notably, Immunogen will be presenting results from their Forward II trial at the virtual ASCO conference in May. This is a trial evaluating mirvetuximab soravtansine in combination with bevacizumab. This combination is important to consider as it avoid the use of a platinum agent (most commonly carboplatin), which are notoriously toxic medications with many side effects. We have seen initial data from this trial which was encouraging, however now we will see additional data from expansion cohorts. I believe this data will be positive, and allow for additional marketable opportunities moving forward. Why do I think this data will be positive? Well first, ASCO has awarded Immunogen an oral presentation, which translates to them being put in the spotlight as opposed to a poster, which was the format for the previous update. Second, I expect this expansion cohort to be hand-picked with patients who have higher expression levels of the folate receptor alpha, which has been shown to have trends toward increased anticancer activity. Finally, the initial results compared favorably to prior ovarian cancer studies, notably the AURELIA trial. This trial evaluated a combination of bevacizumab and chemotherapy. So essentially, if Immunogen can prove mirvetuximab soravtansine in combination with bevacizumab has better anticancer activity, and less side effects, that will be a win win.

Other updates to anticipate from the company include presentation of preclinical data from their next candidate IMGN151, IND filing for their candidate IMGC936 in collaboration with Macrogenics, and advancement of their candidate IMGN632. I will highlight, Immunogen is not a single candidate company. They previously developed Kadcyla (marketed by Roche), however have sold off all the royalty rights to this drug. For a view of their complete pipeline, see below, which does not include their legacy products licensed out to other drug companies.

Moving into financials, which is one of my favorite aspects of Immunogen, they are well capitalized. They ended the first quarter of 2020 with $247.3 million, which they estimate will fund their operations into operations into the second half of 2022, which is well beyond the read-out for the SORAYA trial. Furthermore, mirvetuximab soravtansine is wholly owned by Immunogen, which means they will not have to share potential profits with other companies and have the option to license the drug out for other global markets.

My Final Thoughts: Immunogen provides investors a favorable risk:reward profile in my eyes. There is a very low risk of shareholder dilution in the near term, given the recent raise. Furthermore, during the recent quarterly conference call, management telegraphed a new partner in the Chinese market for mirvetuximab soravtansine, which would bolster the company’s cash position, and provide additional external validation. Along these lines, Immunogen has had a rocky path with mirvetuximab soravtansine, but it would appear they now have nailed down the patient population that would best reap benefits from the drug. Furthermore, they are preparing for additional follow on indications in earlier lines of therapy, most notably with doublet and triplet combinations being studied in Forward II. This will be the largest upcoming catalyst when we see the data at ASCO this month. Finally, the early and pre-clinical stage pipeline looks promising, providing Immunogen the flexibility to develop these products on their own or license them out to reduce the need for additional offerings. I look forward to seeing the ASCO data this month, which I believe will lead to an increase in stock price favoring the bulls.

This is in no way a recommendation to buy or sell securities.

I/we long IMMU and IMGN.