ImmunoGen Cuts Year Forecast, Announces Positive Study Results

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; 

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