News

CAMBRIDGE, Mass., May 10 /PRNewswire/ --ImmunoGen, Inc. (Nasdaq: IMGN) today announced financial results for the third quarter ended March 31, 2001. For the three-month period, the Company reported a net loss to common stockholders of $2,060,000 or $0.05 per basic and diluted share, compared to a net loss to common stockholders of $2,804,000 or $0.09 per basic and diluted share in the same quarter last year. According to First Call estimates, the expected net loss to shareholders was $0.06.

For the nine-month period ended March 31, 2001, the Company reported a net loss to common stockholders of $7,096,000 or $0.20 per basic and diluted share compared to a net loss of $949,000 or $0.03 per basic and diluted share, for the same period last year.

Despite these losses, the Company used only $1,612,000 of cash in operations in the three months ended March 31, 2001 and $1,591,000 of cash for the nine months then ended. ImmunoGen's November 2000 public offering, a collaborator investment of $15,000,000 and receipt of $9,000,000 in collaborator payments substantially improved the Company's balance sheet during the nine months ended March 31, 2001, yielding in excess of $155 million in cash and marketable securities.

Revenues for the quarter ended March 31, 2001 were $752,000. There were no revenues for the same period in 2000. For the nine months ended March 31, 2001 and 2000, revenues were $3,137,000 and $6,505,000, respectively.

Revenues for the third quarter and nine months of 2001 include $155,000 and $2,440,000, respectively, of the $9,000,000 of milestone payments received during the first nine months of 2001. The balance of these milestone payments has been recorded as deferred revenue on the balance sheet and will be recognized as earned. Also included in revenues for the three- and nine-month periods ended March 31, 2001 was $562,000 of reimbursements related to the Company's manufacture of clinical material under certain collaboration agreements. Under the terms of these collaboration agreements, the Company is reimbursed for the fully burdened cost of manufacturing the clinical product.

Research and development expense increased 65% and 83% for the three- and nine-month periods ended March 31, 2001. In January 2001, the Board of Directors of the Company established a bonus plan. In February 2001, a bonus was paid to all employees. The Company expensed the paid bonus during the current quarter and established an accrual for anticipated future bonuses related to current Company and individual performance.

The increase in R&D expenses in the quarter ending March 31, 2001 primarily relates to bonuses paid and accrued during the quarter and payments made in connection with the Avalon Pharmaceuticals, Raven Biotechnologies and MorphoSys AG licensing agreements.

The increase in R&D expenses in the nine months ending March 31, 2001 also includes additional payments made to MorphoSys AG and Genzyme Transgenics, significant expenses related to the support of the Company's Phase I/II clinical trials of its lead cancer product, huC242-DM1/SB-408075 and costs associated with identifying and developing new products for the Company's internal pipeline.

General and Administrative expenses increased 71% and 68% for the three- and nine-month periods ended March 31, 2001 largely due to the bonuses discussed previously, as well as increased business development and investor relations efforts.

Interest income for the quarter and nine months ended March 31, 2001 was $2,584,000 and $4,038,000, respectively, compared to $116,000 and $240,000 for the comparable periods in the prior year. The increase is attributable to higher cash and investment balances resulting from the November 2000 offering and the collaborator investments and payments discussed above.

Mitchel Sayare, Chairman and CEO commented, "During the quarter, we continued to execute on our business model of selectively out-licensing our Tumor-Activated Prodrug (TAP) technology to help fund development of our internal product pipeline. We now have five corporate partners developing TAP products, and their progress will generate cash flows to ImmunoGen in the form of milestones and royalties."

Mr. Sayare added, "As a result of our financing and business development activates, we have the strongest balance sheet in the Company's history and a low operating cash flow burn rate. We continue to expand our internal product pipeline by acquiring access to targets through our in-licensing efforts. We are committed to become a leader in developing a new generation of cancer therapeutics, and will continue to execute on our business model to achieve this goal."

ImmunoGen Third Quarter Highlights

Corporate Collaborations
In March 2001, the Company announced a collaboration with Millennium Pharmaceuticals, Inc., that provides Millennium access to Immunogen TAP technology for use with Millennium's proprietary antibodies over five years. Millennium may use TAP technology in its antibody product research efforts and has options to obtain exclusive product licenses for a restricted number of antigen targets during the collaboration.

Under the terms of this multi-year agreement, ImmunoGen has received an up-front technology access fee of $2,000,000, potential milestone payments per antigen target, and royalties on net sales of any resulting products. Millennium will be responsible for product development, manufacturing and marketing of any products developed through the collaboration. Millennium recently declared Prostate Specific Membrane Antigen, or PSMA, as the first antibody target in this collaboration.

In-License Agreements
The Company also announced two in-license agreements in the third quarter that will provide targets and antibodies to fill the Company's internal product development pipeline.

Under an agreement announced in January 2001, Avalon Pharmaceuticals, Inc. will provide gene targets to ImmunoGen. ImmunoGen will be responsible for the development, manufacture and commercialization of any resulting products. The second agreement announced in March 2001 with Raven Biotechnologies, provides the Company with cell surface targets and monoclonal antibodies for ovarian cancer. Raven's innovative cell biology-based approach to the discovery of novel targets and antibodies identifies targets that cannot easily be found using other approaches and accelerates the development of ImmunoGen's antibody-based therapeutics for ovarian cancer.

Clinical Trial Progress
The Company announced in May 2001 that it has begun enrollment for a third Phase I/II human clinical study with its TAP product, huC242-DM1/SB-408075 for the treatment of colorectal, pancreatic and certain non-small cell lung cancers. The study is designed to evaluate huC242-DM1/SB-408075 in a more dose-intensive regimen, and is being conducted at the Institute for Drug Development of the Cancer Therapy and Research Center (CTRC) in San Antonio, Texas, under the direction of Anthony W. Tolcher, M.D. and Eric K. Rowinsky, M.D.

Another Phase I/II human clinical study, designed to evaluate the safety of huC242-DM1/SB-408075 when administered on a weekly regimen, is ongoing at the University of Chicago Cancer Research Center under the direction of Richard L. Schilsky, M.D.

The initial Phase I/II human clinical study, designed to evaluate the safety of huC242DM1/SB-408075 when administered once a week over a three-week period has completed enrollment. Results of this study will be presented at the 2001 Annual Meeting of American Society of Clinical Oncology in San Francisco on Sunday, May 13, 2001.

The Company and its partner, British Biotech plc expect to initiate imminently a Phase I/II trial for its TAP, huN901-DM1/BB-10901, for the treatment of small cell lung cancer at two clinical sites in the United States. ImmunoGen retains manufacturing rights to huN901-DM1/BB-10901 and commercialization rights in North America and the rest of world, excluding the European Union and Japan.

ImmunoGen, Inc. develops innovative biopharmaceuticals, primarily for cancer treatment. The Company has created potent Tumor-Activated Prodrugs, known as TAPs, consisting of drugs coupled to monoclonal antibodies for delivery to and destruction of cancer cells. The Company has collaborative arrangements with GlaxoSmithKline, Genentech Inc., British Biotech plc, Abgenix, Inc., Millennium Pharmaceuticals, Inc., MorphoSys AG, Avalon Pharmaceuticals, Inc. and Raven Biotechnologies, Inc.

This press release includes forward-looking statements based on management's current expectations. Factors that could cause future results to differ materially from such expectations include, but are not limited to: the success of the Company's research strategy; the applicability of the discoveries made therein; the difficulties inherent in the development of pharmaceuticals, including uncertainties as to the timing and results of preclinical studies; delayed achievements of milestones; reliance on collaborators; uncertainty as to whether the Company's potential products will succeed in entering human clinical trials and uncertainty as to the results of such trials; uncertainty as to whether adequate reimbursement for these products will exist from the government, private healthcare insurers and third-party payers; and the uncertainties as to the extent of future government regulation of the pharmaceutical business.