ImmunoGen Inc. (IMGN) cut its bottom-line expectations for the
current fiscal year on potential higher expenses to develop
drugs.
The guidance cut comes as the drug maker on Monday also
announced a collaboration with Switzerland's Novartis AG (NVS) to
develop targeted anticancer treatments--which will boost cash
levels and help fund the company for at least the next three
years--and said its cancer treatment had encouraging early-stage
study results.
The drug study, conducted among 64 patients, has shown reduction
in tumor volume or no "discernible" increase in tumors in more than
half of the patients who could be assessed quantitatively, the
company said. The targeted anticancer compound is a potential
treatment for Merkel cell carcinoma, small-cell lung cancer,
ovarian cancer, multiple myeloma and other CD56+ tumors, said
ImmunoGen.
Meanwhile, the company now expects a loss for the year ending
June 30 of $60 million to $64 million, not the $50 million to $53
million predicted in August. ImmunoGen also said that amid the
Novartis deal, its cash levels should range from $106 million to
$110 million on June 30, up from the prior prediction of up to $77
million. That amount of cash should be able to fund the company's
operations through June 30, 2013, said ImmunoGen.
Chief Financial Officer Gregory Perry said in August the
guidance then reflected "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."
Under the drug-development agreement with Novartis, ImmunoGen
will receive an upfront fee worth $45 million and potential
milestone payments of up to about $200 million, provided certain
research targets are met.
Shares closed at $7.10 Friday and didn't trade premarket. The
stock has fallen 10% this year.
-By Jodi Xu, Dow Jones Newswires; 212-416-3037;
jodi.xu@dowjones.com