IMGN - ImmunoGen: Despite First Approval They Have Many Problems

Summary

• IMGN received its first approval after 40 long years.
• However, ocular toxicity and confusing PFS are some of the problems here.
• Cash is also a major problem.

After spending 40 years in the lab, ImmunoGen ( IMGN ) delivered its first fully owned approved product last year, but you would never know that from looking at its stock price chart. There was actually a sharp 15% fall on high volume on November 14, the day Elahere got approved. After working 40 years to get here, you would think the market would show a little more interest.

ELAHERE (mirvetuximab soravtansine) is approved to treat adults with folate receptor?–?alpha positive ovarian cancer, fallopian tube cancer, or primary peritoneal cancer who are refractory to platinum-based chemotherapy and have received 1 to 3 prior types of chemotherapy. Along with elahere, a companion diagnostics is also approved. In the registrational phase 3 trial, mirve showed a 32.4% ORR with 5 CRs, where historically, ORR has been only 12% in similar patient populations. This trial, SORAYA, however was not a randomized trial. It just had a single drug arm, so the data could not be compared with anything else. That, and a few safety scares kept the stock from attaining its full potential on the data. Perhaps these are the same reasons behind the stock’s lackluster performance even after approval.

Another issue I covered was unimpressive PFS. As I noted :

In an independent review, a PFS of 5.5 months was seen, which amounts to a 2-month increase from the assumed chemo PFS of 3.5 months. However, investigator review only saw a 4.3-month PFS, which amounts to a mere 0.8 months increase. If Mirasol does not do well on these measures, the FDA may not take that kindly.

The FDA, apparently, overlooked that problem and went ahead and approved mirve.

IMGN is pursuing another pivotal trial of pivekimab in blastic plasmacytoid dendritic cell neoplasm, or BPDCN, which is a rare disease with just 700 US patients. Trial data is to be published in 2024.

ImmunoGen very recently inked a deal with Gilead for this asset in another indication - in combination with Magrolimab in Relapsed/Refractory Acute Myeloid Leukemia. Expected to begin in 2023, the new study will be added to the open label, phase 1 802 study.

The company has two main events planned for 2023. These are:

• Submit data covering mirvetuximab monotherapy and mirvetuximab in combination with bevacizumab regimens for potential inclusion in the National Comprehensive Cancer Network (NCCN) Clinical Practice Guidelines by early 2023.

• Report top-line data for MIRASOL in early 2023.

Inclusion in the NCCN guidelines ensures that the drug is adopted as standard of care by most practicing physicians. Mirasol is the company’s randomized confirmatory trial for mirve, which will be important not only to make the accelerated approval a full approval, but also see if the ocular toxicity seen in Soraya, and for which mirve comes with a black box warning, will be repeated. Strong update of mirve may depend on that safety data. If you ask me, I believe mirasol will also show ocular toxicity, and that will act against the stock. This is because I believe what competitor Sutro said recently about the reason for the ocular toxicity being “Elahere’s poorly designed linker causing prolonged exposure to the toxic payload.” If this is true, larger trials will only uphold this data, not disprove it.

In October, the company presented a retrospective pooled analysis of mirve monotherapy in ??FR?-positive Ovarian Cancer patients. Data in 466 patients showed extensive treatment benefit or ETB in 40 patients (9%). These ETB patients had mostly stage III disease (83%), 1 prior line of therapy (55%), and prior Avastin® (bevacizumab) exposure (60%). Key data were:

• Patients with ETB had an objective response rate (ORR) of 77.5% (31 out of 40 patients), with 10 (25%) achieving a complete response and 21 (52.5%) achieving a partial response. The remaining 8 patients (20%) with ETB had a best response of stable disease and one patient was not evaluable.

• Median duration of response (DOR') in patients with ETB was 22.1 months (95% CI, 13.8-60.0).

• Median PFS in patients with ETB was 17.0 months (95% CI, 16.4-23.1).

What is interesting is that the data showed no difference in the safety profile from those seen earlier. AEs were primarily low-grade gastrointestinal and ocular events that generally resolved with supportive care or, if needed, dose modifications. This indicates a successful therapy in a patient population with high unmet need where every other therapy comes with inconsistent efficacy and poor safety data.

Financials

IMGN has a market cap of $960mn and a cash balance of $309mn. It guided for $80-$90mn in 2022 revenue, mostly through licensing. Cash balance by the end of 2022 was guided to be around $240mn. Research and development expenses were $59.2 million for the quarter ended September 30, 2022 while Selling, general, and administrative expenses were $33.6 million for the quarter. At that rate, the company hardly has cash for 3 full quarters. The revenue stream for elahere will not be sufficient to get them to a strong financial position right away.

Elahere has been priced at $6222 per vial, which is on the higher side from other approved ADCs. Patients will receive between 3 and 4 vials per cycle, which will result in a total price of between $18,500 and just under $25,000 per cycle. The treatment targets around 5000 US patients, which gives it a total addressable market of $125mn.

Bottomline

IMGN has been a leader in ADC technology for decades now, and its R&D sharing revenue model has sustained it. However, there’s still a scent of academia in how the company moves. They need to make more deals, perhaps get some sort of a commercialisation deal for mirve that will satisfy their immediate cash needs, while putting more focus on the rest of their pipeline.

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