ImmunoGen Riding High on Jazz Pharma Deal

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ImmunoGen Inc. (NASDAQ: IMGN) announced this week that it has decided to partner with Jazz Pharmaceuticals PLC (NASDAQ: JAZZ) for the development and commercialization of two early-stage, hematology-related antibody-drug conjugate (ADC) programs, as well as an additional program to be designated during the term of the agreement.

ImmunoGen investors seem pleased with the deal, pushing the stock up more than 30% in the past two days to a new 52-week high.

Under the agreement, these programs include IMGN779, a CD33-targeted ADC for the treatment of acute myeloid leukemia (AML) in Phase 1 testing, and IMGN632, a CD123-targeted ADC for hematological malignancies expected to enter clinical testing before the end of the year.

Also ImmunoGen will be responsible for the development of the three ADC programs prior to any potential opt-in by Jazz. After any opt-in, Jazz would then be responsible for any further development as well as for potential regulatory submissions and commercialization.

In terms of the money, Jazz will pay ImmunoGen an upfront payment of $75 million. Additionally, Jazz will pay ImmunoGen up to $100 million in development funding over seven years to support the three ADC programs.

What this buys is that for each program, Jazz may exercise its opt-in right at any time prior to a pivotal study or any time prior to a biologics license application (BLA). For each program to which Jazz elects to opt-in, ImmunoGen would be eligible to receive milestone payments based on receiving regulatory approval of the applicable product, plus tiered royalties as a percentage of commercial sales.

A few analysts have weighed in on ImmunoGen in the wake of the news:

  • Canaccord Genuity reiterated its Buy rating, with a price target range of $8 to $10.
  • Cowen reiterated a Hold rating on the shares.
  • Leerink Swann reiterated it as Outperform.
  • Cantor Fitzgerald also reiterated its Hold rating.

In addition, Wells Fargo reiterated a Buy rating on Jazz Pharmaceuticals.

Also note that the short interest in ImmunoGen was at a 52-week high of more than 18.48 million shares, as of the August 15 settlement date.

Shares of ImmunoGen were last seen up more than 13% on Wednesday to $8.60, with a new consensus analyst price target of $9.17 and a 52-week trading range of $1.51 to $8.79.

However, Jazz shares were down almost 1% to $144.72 midday Wednesday, with a 52-week range of $95.80 to $163.75 and a consensus price target of $182.29.