Why Is ImmunoGen (IMGN) Down 45.5% Since Last Earnings Report?

It has been about a month since the last earnings report for ImmunoGen (IMGN). Shares have lost about 45.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is ImmunoGen due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

ImmunoGen Beats Earnings & Revenue Estimates in Q4

ImmunoGen reported earnings of 3 cents per share for the fourth quarter of 2019 against the Zacks Consensus Estimate of a loss of 5 cents and the year-ago loss of 28 cents. The earnings figure includes a restructuring charge of $0.5 million.

Revenues came in at $44.9 million, comfortably beating the Zacks Consensus Estimate of $29 million. Revenues also increased from the year-ago quarter figure of $13.4 million

Quarter in Details

During the fourth quarter, Immunogen reported license and milestone fees of $29.6 million compared with $1.75 million in the year-ago period. The significant increase was due to inclusion of amortization of an upfront payment ($14.5 million) received from Jazz, a fee ($7.3 million) related to license agreement executed with CytomX and other milestone payments ($12.7 million).

Fourth-quarter revenues included $15.3 million in non-cash royalty revenues, up 65% year over year.

During the quarter, research and development expenses decreased 40.4% from the year-ago level to $26.1 million due to certain factors including reduction in personnel expenses due to restructuring initiatives. General and administrative expenses increased 0.5% to $9.8 million in the fourth quarter of 2019.

ImmunoGen’s cash and cash equivalents decreased to $176.2 million at the end of December 2019 compared with $204.5 million at the end of September 2019.

Full-Year Results

ImmunoGen reported loss of 70 cents per share for full-year 2019, 42.1% narrower year over year. Revenues came in at $82.3 million, up 53.9% from the year-ago period.

2020 Guidance

ImmunoGen provided its guidance for 2020. The company expects revenues for the full year to be between $60 million and $65 million. It expects operating expense to be in the range of $165-$170 million. The company expects cash and cash equivalents to be between $170 million and $175 million at 2020 end.

It expects cash resources to be enough to fund its operations through the second half of 2022.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

Currently, ImmunoGen has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, ImmunoGen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.