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CAMBRIDGE, Mass., Aug. 16 /PRNewswire/ -- ImmunoGen, Inc. (Nasdaq: IMGN) today announced financial results for the three and twelve months ended June 30, 2001. The following financial results exclude the impact of the Company's adoption of the U.S. Securities and Exchange Commission's Staff Accounting Bulletin No. 101 ("SAB 101"). For a discussion of SAB 101's impact on the Company's financial results, see the section titled "Effect of SAB 101" below.

For the twelve-month period ended June 30, 2001, the Company reported a net loss to common stockholders of $10,611,000 or $0.29 per basic and diluted share compared to a net loss of $237,000 or $0.01 per basic and diluted share, for the same period last year.

Despite these losses, the Company used only $6,414,000 of cash in operations in the twelve months ended June 30, 2001. 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 liquidity. As of June 30, 2001, the Company had $150,800,000 in cash and marketable securities. The $9,000,000 in collaborator payments consists of up-front technology access fees of $5,000,000 and $2,000,000 from Abgenix, Inc. and Millennium Pharmaceuticals respectively, and a $2,000,000 milestone payment from GlaxoSmithKline.

Revenue for the twelve months ended June 30, 2001 was $3,424,000 as compared to revenue of $11,181,000, for the same period last year. Revenues for the fiscal year consisted primarily of payments associated with new collaborations with Abgenix and Millennium as well as payments made pursuant to existing collaborative agreements. Also included in revenues for the twelve-month period ended June 30, 2001 is $597,000 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 clinical product.

Research and development expense increased 71% to $15,213,000 for the twelve-month period ended June 30, 2001, reflecting the Company's commitment to expand its internal capabilities and the continued investment in its product pipeline. R&D expense in the twelve months ending June 30, 2001 also includes significant costs related to the support of the Company's Phase I clinical trials of its lead cancer product, huC242-DM1/SB-408075.

General and administrative expenses increased 47% to $4,482,000 for the twelve-month period ended June 30, 2001. The increase reflects increased business development efforts and key hires.

Mitchel Sayare, Chairman and CEO of the Company commented, "This has been a landmark year for ImmunoGen. We ended fiscal year 2001 in the strongest business and financial position in our Company's history. We have two products currently in clinical trials and continue to invest in and develop our product pipeline. We have been effective in generating cash flows to fund our development efforts by executing on our business model of selectively out- licensing our Tumor-Activated Prodrug (TAP) technology. 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. Combined with our substantial cash position of $150 million, our collaborator agreements will provide the necessary capital to execute our business model."

Mr. Sayare added, "In 2002 our strategy is to further invest in our development capabilities and product pipeline. We plan to continue to maximize the value of our TAP technology through new collaborations. We are committed to becoming a leader in developing a new generation of cancer therapeutics, and will continue to execute on our business model to achieve this goal."

Effect of SAB 101
Effective June 30, 2001, the Company changed its method of accounting for revenue recognition in accordance with SAB 101. Previously, the Company had recognized revenues relating to non-refundable, up-front, license and milestone payments and certain research funding payments from strategic partners in accordance with the terms of the agreements with those strategic partners. Under the new accounting method that the Company has adopted retroactively to July 1, 2000, the Company now recognizes revenue from non- refundable, up-front, license and technology access payments, which are not specifically tied to a separate earnings process, ratably over the relevant period of performance of the agreement. When payments are specifically tied to a separate earnings process, revenue is recognized when the specific performance obligation associated with the payment is completed. Performance obligations typically consist of, but are not limited to, significant milestones in the development life cycle of the related technology, such as initiation of clinical trials, filing for approval with regulatory agencies, and approvals by regulatory agencies. In addition, when appropriate, the Company recognizes revenue from certain research payments based upon the level of research services performed during the agreement.

As a result of adopting SAB 101, ImmunoGen recorded a cumulative effect of a change in accounting principle related to collaboration revenues recognized in prior periods. After implementing SAB 101, ImmunoGen reported revenue, as adjusted, of $4,479,000. After implementing SAB 101, the Company reported a net loss to common stockholders of $9,556,000 or $0.26 per basic and diluted share, not including the one-time, non-cash charge representing the cumulative effect of the change in accounting principle taken as a result of the adoption of SAB 101 of $5,735,000 or $0.16 per basic and diluted share.

ImmunoGen Fiscal Year Highlights

Corporate Collaborations
In September 2000, the Company announced a collaboration with Abgenix, Inc. that provides Abgenix access to ImmunoGen's TAP technology for use with Abgenix's proprietary antibodies over five years. Abgenix may use TAP technology in its antibody product research efforts and has options to obtain exclusive product licenses for a restricted number of antibodies during the collaboration.

Under the terms of this multi-year agreement, ImmunoGen has received an up-front technology access fee of $5,000,000 and is entitled to receive potential milestone payments for each antigen target and royalties on net sales of any resulting products. Abgenix will be responsible for product development, manufacturing and marketing of any products developed pursuant to the collaboration. In addition, Abgenix purchased $15,000,000 of ImmunoGen common stock in connection with the agreement.

In March 2001, the Company announced a collaboration with Millennium Pharmaceuticals, Inc. that provides Millennium access to ImmunoGen's 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 and is entitled to receive 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 that will provide targets and antibodies to augment 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 human clinical study with its lead 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 human clinical study, designed to evaluate the safety of huC242-DM1/SB-408075 when administered in 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 human clinical study, designed to evaluate the safety of huC242DM1/SB-408075 when administered once every three weeks has completed enrollment. Positive safety results of this study were presented at the 2001 Annual Meeting of the American Society of Clinical Oncology.

The Company and its partner, British Biotech plc, initiated 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 worldwide manufacturing rights to huN901-DM1/BB-10901 and commercialization rights in North America and the rest of the world, excluding the European Union and Japan.

Capitalization
In November 2000, the Company raised $133 million, before offering expenses, through the sale of four million shares of its common stock. As of the end of fiscal year 2001, the Company had $150.8 million in cash and marketable securities.

Conference Call
The Company will host a conference call and live web cast to discuss its financial and operating results for the fiscal year ended June 30, 2001. The conference call and web cast is scheduled for August 16, 2001 at 4:30 EDT.

The conference call-in number is (913) 981-5507 (no passcode required). For those unable to participate in the conference call, there will be a continuous playback of the call available from approximately 7:30 p.m. (EDT) on August 16 through 11:59 p.m. (EDT) on August 22, 2001. To listen to the playback, please call (719) 457-0820 and refer to passcode 544395.

ImmunoGen, Inc.
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; the Company's ability to continue to in license third- party technologies; the Company's ability to successfully negotiate new TAP out license agreements; potential fluctuations in the Company's revenues, expenses and cash flows; 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 be available 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.