ImmunoGen, Inc.
Aug 3, 2012
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ImmunoGen, Inc. Reports Fourth Quarter and Fiscal Year 2012 Financial Results and Provides Corporate Update and Fiscal Year 2013 Guidance

WALTHAM, Mass.--(BUSINESS WIRE)-- ImmunoGen, Inc. (Nasdaq: IMGN), a biotechnology company that develops targeted anticancer products using its antibody expertise and Targeted Antibody Payload (TAP) technology, today reported financial results for the three-month period and fiscal year ended June 30, 2012 and provided an update on the Company.

"We believe the trastuzumab emtansine clinical data reported at ASCO convey the transformational potential of our TAP technology," commented Daniel Junius, President and CEO. "It is impressive to see a new product candidate demonstrate both greater efficacy and better tolerability than standard care, and is noteworthy that these benefits were seen for a cancer in which considerable progress already had been made. It also was significant that these were found in a solid tumor indication — approximately ninety percent of cancer diagnoses are for solid tumors and very few antibody-based therapies have been effective for these cancers."

Mr. Junius continued, "Roche continues to make important progress with trastuzumab emtansine, not only advancing it toward marketing application submission this year, but also broadening the clinical program to extend into early stage HER2+ breast cancer. At the same time, we are making visible progress building and advancing our proprietary product pipeline while other of our partners also are advancing toward pivotal testing."

Product Pipeline Update

Fiscal Year 2012 Financial Results

For the Company's fiscal year ended June 30, 2012 (FY2012), ImmunoGen reported a net loss of $73.3 million, or $0.95 per basic and diluted share, compared to a net loss of $58.3 million, or $0.85 per basic and diluted share, for its fiscal year ended June 30, 2011 (FY2011). For the quarter ending June 30, 2012, ImmunoGen reported a net loss of $22.4 million, or $0.29 per basic and diluted share, compared to a net loss of $16.2 million, or $0.23 per basic and diluted share, for the same quarter in FY2011.

Revenues in FY2012 were $16.4 million, compared to $19.3 million in FY2011. Revenues in FY2012 include $9.2 million of license and milestone fees compared to $6.4 million in FY2011. The FY2012 fees include $5.0 million in milestone payments earned with partner advancement of one TAP compound into Phase II clinical testing and two TAP compounds to Phase I clinical testing. The FY2011 fees include $3.0 million in milestone payments earned with partner advancement of two TAP compounds to Phase I clinical testing. Revenues in FY2012 also include $4.5 million of research and development support fees and $2.7 million of clinical materials revenue, compared to $7.3 million and $5.7 million, respectively, for FY2011. The differences in support fees and clinical material revenue from the prior year are primarily due to the variable nature in the amount of research and in the number of clinical batches produced and released for partners on a year-to-year basis.

Operating expenses in FY2012 were $89.6 million, compared to $79.5 million in FY2011. Operating expenses in FY2012 include research and development expenses of $69.2 million, compared to $63.5 million in FY2011. This increase is primarily due to greater investment by the Company in aggressively advancing its wholly owned product candidates. It includes increased personnel expenses — including increased stock compensation expense — in support of internal programs, partially offset by a net reduction in expenses associated with providing partners with clinical batches. Operating expenses also include general and administrative expenses of $20.4 million in FY2012, compared to $16.0 million in FY2011. This increase is primarily due to increased personnel expenses, particularly stock compensation expense.

Other (expense) income, net, was $(62,000) in FY2012, compared to $1.9 million in FY2011. Other income in FY2011 included $1.2 million of federal grant funding the Company was awarded under the Patient Protection and Affordable Care Act of 2010 to develop new anticancer therapies and $0.3 million of gains recognized on sales of investments.

Cash used in operations was $34.3 million in FY2012, inclusive of the $20 million upfront payment from the collaboration established with Eli Lilly in the second quarter of FY2012. This compares with $8.0 million of cash used in operations in FY2011, inclusive of the $45 million upfront payment from the collaboration established with Novartis in the second quarter of FY2011. Capital expenditures were $2.9 million and $2.0 million for FY2012 and FY2011, respectively.

ImmunoGen had approximately $160.9 million in cash and cash equivalents as of June 30, 2012, compared with $191.2 million as of June 30, 2011 and had no debt outstanding in either period. Not included in the June 30, 2012 cash and cash equivalents are the approximately $94 million in net proceeds from the Company's recent public stock offering.

Financial Guidance for FY 2013

ImmunoGen expects its net loss for its fiscal year ending June 30, 2013 to be between $70 million to $74 million, its cash used in operations to be between $78 million to $82 million, and its capital expenditures to be between $4 million to $5 million. Cash and marketable securities at June 30, 2013 are anticipated to be between $172 million to $176 million, inclusive of the net proceeds from the public stock offering recently completed.

"Roche, Sanofi and the rest of our partners are making tangible progress with compounds that can generate meaningful revenue to ImmunoGen," commented Gregory Perry, Executive Vice President and CFO. "Our strong financial position enables us to aggressively fund advancement of our wholly owned compounds to further enhance shareholder value."

Conference Call Information

ImmunoGen is holding a conference call today at 8:00 am ET to discuss the quarterly results. To access the live call by phone, dial 913-312-1510. Passcode is 6959547. The call also may be accessed through the Investor Information section of the Company's website, www.immunogen.com. Following the live webcast, a replay of the call will be available at the same location through August 17, 2012.

About ImmunoGen, Inc.

ImmunoGen, Inc. develops targeted anticancer therapeutics using the Company's expertise in tumor biology, monoclonal antibodies, potent cancer-cell killing agents and engineered linkers. The Company's TAP technology uses monoclonal antibodies to deliver one of ImmunoGen's proprietary cancer-killing agents specifically to tumor cells. There are now ten TAP compounds in clinical development, of which three are wholly owned by the Company. ImmunoGen's collaborative partners include Amgen, Bayer HealthCare, Biotest, Lilly, Novartis, Roche, and Sanofi. The most advanced compound using ImmunoGen's TAP technology, trastuzumab emtansine, is in Phase III testing through the Company's collaboration with Genentech, a member of the Roche Group. More information about ImmunoGen can be found at www.immunogen.com.

Herceptin® is a registered trademark of Genentech.
Revlimid® is a registered trademark of Celgene Corporation.

This press release includes forward-looking statements based on management's current expectations. These statements include, but are not limited to, ImmunoGen's expectations related to: the Company's net loss, cash used in operations and capital expenditures in its 2013 fiscal year; its cash and marketable securities as of June 30, 2013; the occurrence, timing and outcome of potential pre-clinical, clinical and regulatory events related to the Company's and its collaboration partners' product programs; and the presentation of preclinical and clinical data on the Company's and collaboration partners' product candidates. For these statements, ImmunoGen claims the protection of the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Various factors could cause ImmunoGen's actual results to differ materially from those discussed or implied in the forward-looking statements, and you are cautioned not to place undue reliance on these forward-looking statements, which are current only as of the date of this release. Factors that could cause future results to differ materially from such expectations include, but are not limited to: the timing and outcome of ImmunoGen's and the Company's collaboration partners' research and clinical development processes; the difficulties inherent in the development of novel pharmaceuticals, including uncertainties as to the timing, expense and results of preclinical studies, clinical trials and regulatory processes; ImmunoGen's ability to financially support its product programs; ImmunoGen's dependence on collaborative partners; industry merger and acquisition activity; and other factors more fully described in ImmunoGen's Annual Report on Form 10-K for the fiscal year ended June 30, 2011 and other reports filed with the Securities and Exchange Commission.

IMMUNOGEN, INC.
SELECTED FINANCIAL INFORMATION
(in thousands, except per share amounts)
       
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
June 30, June 30,
2012 2011
ASSETS
 
Cash and cash equivalents $ 160,938 $ 191,206
Other assets   19,370     26,435  
 
Total assets $ 180,308   $ 217,641  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities $ 16,254 $ 14,566
Long-term portion of deferred revenue and other long-term liabilities 80,164 63,106
Shareholders' equity   83,890     139,969  
 
Total liabilities and shareholders' equity $ 180,308   $ 217,641  
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Fiscal Year Ended
June 30, June 30,
  2012       2011     2012       2011  
 
Revenues:
Research and development support $ 1,184 $ 1,566 $ 4,517 $ 7,256
License and milestone fees 950 2,859 9,161 6,393
Clinical materials revenue   818     2,080     2,679     5,656  
 
 
Total revenues   2,952     6,505     16,357     19,305  
 
Expenses:
Research and development 19,539 18,261 69,192 63,453
General and administrative   5,726     4,438     20,422     16,040  
 
Total operating expenses   25,265     22,699     89,614     79,493  
 
Loss from operations (22,313 ) (16,194 ) (73,257 ) (60,188 )
 
Other (expense) income, net   (101 )   44     (62 )   1,914