Biotech Portfolio Updates- Buying More Immunogen

Investing, particularly in biotech, comes with plenty of risks and uncertainties. These uncertainties are usually results of clinical trials, which are very unpredictable and unfortunately do not end up well in most cases.  Once in a while, a company and its stock price diverge in a way that substantially decreases the risk in a particular company without increasing the stock price. We believe what happened yesterday with Immunogen (IMGN) is a classic case of this phenomenon.

Immunogen, similarly to all its peers in the field of drug development for cancer is a high risk investment, and  will surely have more bad news than good news to tell its investors over  the years, simply because in drug development, successes are substantially outnumbered by failures. Yesterday should have been one of the happiest days for Immunogen’s shareholders, as a great uncertainty that has been hovering over the company was resolved, and turned into a great achievement. Genentech’s (DNA) T-DM1 is by far the most important drug for Immunogen currently, for reasons explained here, here and here. Two days ago, Genentech publically stated that by early 2009, T-DM1 will be in two registration trials for indications with blockbuster potential. Of course, there is no way of knowing the final outcomes of either study, but it is important to realize that Genentech based its decision based on much more than the data that was published  from several T-DM1 trials. Consequently, Genentech statement turned Immunogen into a company with a more attractive risk/reward ratio, simply because the risk component is substantially lower today than prior to the announcement.Regardless of the recent news, Immunogen is expected to have additional good news on several fronts in the coming 6-9 months.

 In the coming 9 months, we expect the company to announce whether IMGN242 managed to demonstrate an objective response in a phase II trial in gastric cancer patients. This announcement seems like a classic win/win   situation. Investors have already given up on this agent, which showed disappointing results in the current as well as in its earlier version. The company already stated it would discontinue development of IMGN242 if no responses are shown among the first cohort of 23 patients. This would free up resources and enable the company to focus on other in-house products, so ironically, even a negative announcement would be perceived as a good things by investors, who want to leave that story behind them. We are not expecting great things from this trial, but we do note that a fairly impressive response in one of the first six patients enrolled to the study was reported (bottom right of the poster) at ASCO. Thus, there is still a chance for an objective response.

Also in the coming 9 months, we expect Immunogen to announce several licensing deals with new and present partners. First and foremost, based on management remarks and market trends, we expect the company to announce one broad technology licensing collaboration with a pharmaceutical company. The deal could be either very general such as the 5 year collaboration with Sanofi-Aventis. It can also be more specific, similarly to the collaboration with Genentech which includes specific targets. 

Speaking of Sanofi and Genentech, we expect additional candidates from these collaborations to enter the clinic in the coming 9 months. In a recent investor conference, Immunogen’s CEO revealed that  they had recently met with Genentech and that Genentech is “making progress” with antibody-drug conjugates (ADC) against three additional targets. It will be safe to expect that one of these agents will enter the clinic in the foreseeable future. Sanofi will most likely advance two additional products into the clinic, SAR566658 and SAR650984. SAR566658 is an ADC that targets DS6, a target that can be found on a plethora of solid tumors. SAR650984 is a naked antibody that will be evaluated for the treatment of blood cancers.  

With respect to actual data publication, Immunogen will publish new data on IMGN901, which is currently in a phase I trial in multiple myeloma. Antibodies for the treatment of multiple myeloma are currently one of the hottest topics in hematology, as can be echoed by the very high activity in the field that attracted Genentech, Bristol-Myers Squibb and Biogen-IDEC, just to name a few.  Data from this study will be published at the ASH annual meeting this December. We still remain cautious about the activity of IMGN901 as a single agent, after last year’s disappointing results, nevertheless, Immunogen’s CEO alluded to this data by stating that “…the data look good, we continue to see patients derive clinical benefit…“, so there could be a positive surprise there.

Shortly afterwards, at the  Annual San Antonio Breast Cancer Symposium, Genentech is expected to give an update on an ongoing phase II trial of T-DM1 in 2nd and 3rd line metastatic breast cancer, which should be positive given Genentech’s recent decision.  Early next year, Genentech is expected to dose the first patient in the phase III pivotal trial, which will trigger a potentially double digit milestone payment, will announce the receipt of a substantial milestone payment to Immunogen.It is important to note that despite all these positive catalysts down the road, there are likely to be disappointing news as well, as is always the case with drug development. However, at this point of time, with two potentially registration studies underway, Immunogen seems to be cheaper than ever, which is why we decided to increase our holding in the company.

We also added a new company, Santarus (SNTS), on which we hope to elaborate in the future.


Immunogen and Seattle Genetics – On The Verge Of An Inflection Point


This year’s ASCO annual meeting should be a very exciting event for anyone who has been following the field of antibody-drug conjugates (ADCs). During the conference, investigators will present impressive clinical data generated by ADCs powered by Immunogen’s (IMGN) and Seattle Genetics’ (SGEN) technologies. The data includes studies for Genentech’s (DNA) T-DM1, Seattle Genetics’ SGN-35 and Curagen’s (CRGN) CR011-vcMMAE .  These data will put ADCs on the verge of transitioning from a remote niche to one of the hottest areas in oncology.

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Immunogen at ASH 2007 – part II (AVE9633)


Regardless of IMGN901’s specific case, the impression I am getting from all the scientific material I come across that deals with Immunogen’s (IMGN) technology, is that IMGN901 will probably be the last ADC (antibody-drug conjugate) powered by the cleavable DM1 linker. There are currently no ADC programs, except from IMGN901, that utilize this specific linker. As I mentioned in one of my SGEN’s (SGEN) pieces, Genentech seems to prefer a noncleavable linker for the majority of its ADCs. Another example may be, Centocor, who licensed Immunogen’s technology for arming a antibodies targeted against alpha integrin and evaluated both DM1 and DM4 cleavable linkers with the same antibody. Results from several animal experiments showed that the cleavable DM4 version was much more stable in the bloodstream and active in inhibiting tumor growth than the cleavable DM1 version.

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Immunogen at ASH 2007 – part I (IMGN901)

At ASH (American Society of Hematology), Immunogen (IMGN) and its partners presented data on several projects including IMGN901(formerly known as HuN901) for Multiple Myeloma and AVE9633 for AML (Acute Myelogenous Leukemia) .


The company presented updated results from its  phase I dose escalation study in Multiple Myeloma patients who have failed prior treatments. IMGN901 was administered weekly for 2 consecutive weeks in a 3-week cycle, and the company reported results from 12 patients in 4 cohorts of 3. The evaluated doses were 40 mg/m2/week, 60 mg/m2/week, 75 mg/m2/week, and 90 mg/m2/week. Immunogen had previously published results for the two lower doses, which included one partial response (PR) and 2 stable disease (SD) in the 60 mg/m2/week cohort. In its ASH presentation, the company revealed that among the 6 patients who received the 2 higher doses (75 and 90 mg/m2), there was also one partial response in a patient at the 90 mg/m2/week cohort, although this patient had to drop out of the trial due to unrelated issues. Of note, the patient who responded at 60 mg/m2 is still on the study, after more than 10 months.


I must admit I expected results to be somewhat better, based on management’s remarks in several investor conferences. I wrongly concluded that if a company gets a partial response in 1 out of 3 patients who were dosed at 60 mg/m2, and claims to be very excited about the 2 higher doses, there would be at least one partial response in each cohort to generate a response rate of 33%. Nevertheless, these results are quite positive for two reasons. First, all patients who participated in this trial were heavily pretreated patients, who had already received more than four prior therapies. Second, IMGN901 demonstrated excellent safety profile as no severe side effects were documented. This means that additional patients can be recruited and receive higher doses, that might be more effective.


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SGEN’s partnership with Curagen (CRGN)


CR011-vcMMAE is an ADC currently being developed by Curagen (CRGN), based on Seattle Genetics’ ADC technology. The ADC comprises of an antibody against GPNMB, a protein on the surface of melanoma cells linked to a drug payload. Both the drug and the linker in this case are identical to those used by Seattle Genetics in SGN-35. The story behind this agent demonstrates the need of ADC technology and the high value it has in today’s drug development market. It also demonstrates that going after one of the most challenging indication with a relatively new platform, may not be the best way to validate it.

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Seattle Genetics’ technology – The Arms Merchant

The capability of developing antibodies for cancer can be found at most pharma companies’ R&D centers, either as a result of internal R&D efforts or M&A activity, such as the acquisitions of Cambridge Antibody Technology and Abgenix by AstraZeneca (AZN) and Amgen (AMGN), respectively. Therefore, there is nothing unique about a company that can develop cancer antibodies, even though there are many other differentiating factors between the companies. The crucial element in developing an ADC is linking the antibody to the drug payload. As simple as this concept may sound, its realization is highly complex and challenging, and in our opinion represents the main entry barrier to the field. As ADCs are also termed “armed antibodies”, companies like Seattle Genetics can be viewed as the arms merchants of the antibody industry.

As an arms merchant, the company focuses on two areas: Technologies for conjugating antibodies to toxic drugs and potent toxic compounds that will be attached to the antibodies. The ability to develop highly potent drugs and conjugation technologies is Seattle Genetics’ main asset, since this is the ideal way to differentiate itself and to broaden the company’s pipeline through partnership deals. In an industry where the vast majority of candidates fail, it is imperative for companies like Seattle Genetics to have as many candidates as possible, even if eventually most of the revenues go to the partners. At this stage, with the limited resources Seattle Genetics has, betting on few wholly owned candidates is statistically unfeasible. Although the company has had its share of failures over the years, we believe the advances made both in terms of linkers and drugs will finally enable it to generate a constant flow of candidates into the clinic, whether independently or in collaboration with partners. In order to look at the progress that has been made so far, the best place to start is the failure of Seattle Genetics’ flagship product, SGN-15, an antibody linked to the chemo agent Doxorubicin, whose development was discontinued in mid 2005 after a series of discouraging clinical trials. On top of the usual uncertainties related to drug development, there were probably two main factors that severely sabotaged this candidate’s prospects.

The first factor was the use of an approved chemotherapy drug such as Doxorubicin as the conjugated drug. Chemotherapy agents that are conventionally administered to patients are distributed across the body and affect healthy cells as well as cancer cells, leading to the so typical side effects of chemo. Consequently, approved chemo drugs represent a fine balance between two needs: They must be strong enough in order to kill cancer cells, but not too strong, so the damage caused to normal tissues is acceptable. In contrast, when chemo drugs are linked to an antibody, they can be targeted to tumors specifically, since the antibody guides them. This enables the use of much more potent drugs, otherwise impossible to use in conventional administration. Furthermore, since only a small fraction of the administered antibodies eventually accumulate in cancer cells, it is critical that the few antibodies that do reach the tumors carry a very potent payload. This can be accomplished by two approaches: The antibody must either be loaded with a large amount of drug molecules or a small amount of very potent drug molecules. Although there are efforts on both fronts, the latter approach is more practical, at least for now. Bottom line, in order to have an effective ADC, drug developers should use chemo drugs that are too toxic to be generally administered. This approach was validated by the only FDA-approved ADC, Mylotarg, which utilizes Calicheamicin, a drug that is too toxic on a stand alone basis. Both Seattle Genetics and Immunogen (IMGN) are currently using such compounds as the basis for their ADC platforms: Seattle Genetics picked auristatin, while Immunogen focuses on maytansine. The second disadvantage in SGN-15 is linker instability. An ideal linker should be very stable in the bloodstream but also readily degradable once inside cancer cells, so it would release the free drug only inside target cells. For SGN-15, Seattle Genetics uses an acid-labile linker, which is relatively stable in neutral environment (bloodstream) and very unstable in acidic environment (present in certain compartments inside cells). This kind of linker is used very successfully in Mylotarg for the treatment of acute myelogenous leukemia [AML], making Seattle Genetics’ pick very reasonable at the time. However, SGN-15’s stability in patients proved to be pretty low, mainly as a result of premature linker degradation in the bloodstream, before reaching the tumors. Mylotarg had a great success despite being based on an acid-labile linker because it attacks a blood-borne malignancy and the antibody can find its target quickly, before linker degradation and drug release. In contrast, the dense mass of solid tumors makes them far less accessible compared to blood cancers. Therefore, the ADC must be present in the bloodstream for longer periods at higher concentrations, necessitating highly stable linkers.

By the time SGN-15 was scrapped, Seattle Genetics already had its next generation of ADC technology up and running. On the drug front, the company licensed a potent drug called auristatin E from Arizona State University, which was found to be almost 200-fold more potent than Doxorubicin, and used it as a basis for its own proprietary drug, MMAE. This drug is a very potent anti-tubulin inhibitor that can be synthesized cheaply in very large quantities and subsequently be conjugated to a virtually unlimited number of different antibodies. Another appealing attribute of Seattle Genetics’ conjugation technology is the highly homogeneous population of ADCs, as oppose to other methods, including that of Immunogen. On the linker front, Seattle Genetics chose a peptide-based linker which is cleaved by enzymes that are present inside cells but not in the bloodstream. Upon cancer cell binding, ADCs are trafficked to a special compartment called lysosome, where there is an abundance of enzymes that cleave the linker and release the drug inside the cell. Seattle Genetics’ peptide linker has demonstrated an increase of more than 3-fold in stability in the bloodstream, which, combined with the high potency of MMAE, puts the company’s candidates in a better starting point.

It is crucial to understand that ADCs are not commodity products, but highly complex systems that require a great deal of customization and optimization. Multiple factors, including (but not limited to) cancer type, the target on cancer cells, exact binding site, type of linker, efficiency of drug release, mechanism of conjugation, type of drug and amount of drug payload affect the performance of each candidate. The number of variations for each ADC is high but it is impossible to predict the optimal combination in advance. Thus, the exact antibody-linker-drug combination should be tailored specifically for each ADC candidate, perhaps even for each condition the candidate is aimed at treating. In order to stay relevant, Seattle Genetics must constantly develop new linkers and drugs, in addition to developing antibodies and identifying attractive cancer related targets. It is not surprising though, that the company is currently developing next generation linkers and drugs that will possibly be employed in future projects.

Author is long SGEN

Sanofi-Aventis’ AVE1642- In Partnership With Immunogen

AVE1642 is a “naked” antibody that binds insulin-like growth factor (IGF-1R). It is currently evaluated in a phase I clinical trial that started in October of last year. Interestingly, this antibody is not attached to a drug payload, and is most likely intended to be used in combination with chemotherapy.

IGF-1R is postulated to be a very important target in several types of cancers such as colorectal, lung and breast cancers. This receptor has been shown to contribute to the development and progression of tumors, as its activation triggers a cascade of signals ultimately leading to survival and proliferation. An antibody targeted at IGF-1R may serve as an anticancer agent by preventing the growth factors from binding the receptor or by inducing an immune response against cells that express IGF-1R. IGF-1R is also expressed by normal cells, including blood vessels, which offers an explanation to why Sanofi-Aventis decided not to arm AVE1642 with a deadly payload. This is a good example for cases where ADCs cannot be used, because they will probably lead to unbearable side effects.

Since targeting IGF-1R by monoclonal antibodies seems very promising, several other companies, including Pfizer (PFE) and Imclone (IMCL) are actively pursuing this pathway. Both companies have already published results from phase I clinical trials, showing some clinical activity and a very good safety profile, which makes Sanofi Aventis a little late to the party, but eventually, demonstrating clinical activity is the top priority for AVE1642.


Author is long IMGN

Immunogen’s huC242-DM4

The story behind this compound perhaps explains the considerable skepticism surrounding Immunogen’s platform, and should serve as a demonstration for the risks and uncertainties in drug development. huC242-DM4 is comprised of the humanized antibody huC242 , which binds to CanAg, which is expressed on colorectal, pancreatic and gastric cancer cells. The first ADC based on huC242 was huC242-DM1, which is identical to huC242-DM4 with one difference – the linker.

huC242-DM1 entered 2 phase I clinical trials, in which the vast majority of patients had colorectal cancer. Unfortunately, the compound’s performance was rather weak, leading to some minor responses but no objective responses (50% regression in tumor burden lasting at least 6 weeks). There were two possible explanations for the disappointing activity. First, it is well known that colorectal cancer is relatively resistant to antimicrotubule agents, such as paclitaxel (Taxol®) and maytansine, (which is the drug Immunogen uses for its compounds). Second, the compound had a rather poor stability in the bloodstream, which led to lower drug concentrations shortly after administration. In parallel to the phase I, the company started evaluating ADCs based on the same antibody, but with a different linker – huC242-DM4. These evaluations revealed that the substitution of the linker led to an increase of more than 2-fold in the ADC’s stability in comparison to huC242-DM1.

Subsequently, on October 2004, the company announced that it had decided to replace huC242-DM1 by huC242-DM4. That meant, of course, a new phase I trial must take place, in order to assess the safety of the new compound. The phase I clinical trial was initiated in mid 2005, with results announced in June of 2007. In this trial, the vast majority of patients were also advanced-stage colorectal cancer patients, so the chances didn’t look too good in the first place. Although there were no objectives responses, huC242-DM4 indeed proved to be more stable than the earlier version of this ADC. It was quite clear that huC242-DM4 will not be effective against colorectal cancer, so the company decided to assess the compound’s activity for the treatment of gastric cancer, as approximately half of all gastric cancer tumors express CanAg. The company recently initiated a phase II trial in advanced gastric cancer patients, who have failed front-line chemotherapy. During the second half of the 20th century, the incidence of gastric cancer has dramatically decreased in developed countries, but it is still a leading cause of death, responsible for over 11,000 deaths annually in the US alone. Just like many other types of cancer, gastric cancer is curable in its early stages, however, unfortunately, in many cases it is diagnosed in its advanced stages, where the only option is chemotherapy treatments. The company takes pride in the fact that gastric cancer has been found to be highly sensitive to huC242-DM4 in preclinical studies, but we also know that was the case for several colorectal cancer cell lines. Fortunately, last year, the antimicrotubule agent, docetaxel (Taxotere®) was approved by the FDA for the treatment of gastric cancer in combination with other drugs. Additional clinical trials, including trials published this year, also support the use of Taxotere for the treatment of gastric cancer. This is in striking contrast to colorectal cancer, for which antimicrotubule agents are not approved. In addition, both Taxotere and Taxol demonstrated clinical activity in gastric cancer as single agents. These are very encouraging news, since this time, huC242-DM4 actually stands a chance of showing some sort of clinical response, especially in light of the higher potency of DM4 relatively to Taxotere. Nevertheless, although Taxotere was the first FDA approved drug to demonstrate a survival advantage in gastric cancer in more than a decade, it did not improve survival dramatically. The fact that patients enrolled to the phase II trial had failed at least one chemotherapy treatment makes it even more challenging.

In order to get a reliable assessment of huC242-DM4’s efficacy with minimal allocation of resources, Immunogen will first evaluate only 17 patients, hoping that there will be at least one objective response (50% regression in tumor size lasting at least 6 weeks). Statistically, if no clinical response is observed among these 17 patients, it is likely that the drug won’t be very effective for gastric cancer. That means that interim results from this study may be published in the coming months. In our opinion, this trial is the most important one for Immunogen, as even one partial response can open the door for recruitment of additional patients and possibly for a phase III trial already in 2009. The market expectations regarding this compound are pretty low, which will make any positive indication an extremely positive surprise. Bearing in mind this compound is fully owned by Immunogen, clinical success in the huC242-DM4 front, will lead to substantial appreciation in the stock price.

Immunogen’s lead candidate – Herceptin-DM1 (T-DM1)

There is no doubt that Immunogen’s most high-profiled candidate is Herceptin-DM1. Its development started back in 2000, as it looked like the perfect candidate for ADC development. Herceptin is an approved block-buster antibody for the treatment of breast cancer. It recognizes and binds the Her2/ErbB2 receptor, which has been strongly validated as a specific and efficient for the targeting of breast cancer cells. In addition, the superiority of Herceptin-DM1 can be easily demonstrated by administering it to patients who do not respond to Herceptin. If Herceptin-DM1 demonstrates a clinical effect among these “Herceptin resistant” patients, it may be the ultimate proof of concept for Immunogen’s platform.

Herceptin-DM1 has recently entered a phase II clinical trial, following a phase I trial which was launched in April 2006. The study was designed to evaluate Herceptin-DM1 among patients who had initially responded to Herceptin but then relapsed. In other words, in the beginning, these patient benefited from Herceptin but for some reason, their tumors eventually became resistant to Herceptin. It is important to note that the tumors which became resistant to Herceptin were still recognized by the antibody despite being unaffected by its binding. This leads us to one of the major advantages immunoconjugates have over “naked” antibodies.

One of the biggest problems with developing antibodies for cancer is that most of them have no therapeutic effect by themselves, even if they target and bind cancer cells specifically. As a result, for every Herceptin out there, there are dozens, if not hundreds of antibodies who can bind and recognize specific antigens on cancer cells, but have no therapeutic use. Attaching drugs to those antibodies may turn many of them into very potent agents, regardless of their inactivity as naked antibodies. All of the sudden, those “useless” antibodies turn into an infinite pool of potential drugs, so there is no need to develop new antibodies. That is why, in our opinion, technologies such as Immunogen’s do not only advance the field of cancer antibodies toward safer and more effective treatments, but actually represent a true revolution, as it shortens time-to-market of potential drugs. Since there are so many well studied antibodies that have already been developed and characterized, the resources and time required for bringing such immunoconjugates to the clinic become dramatically lower.

Back to our Herceptin-DM1, Genentech started the phase I in April 2006 and disclosed initial results in December 2006, followed by more updates in 2007. The goal of phase I trials is primarily to evaluate whether the drug is safe, by examining side effects and several doses. When dealing with a potent agent such as DM1, there is always a chance for something to go wrong, but luckily, Herceptin-DM1 did not have any special side effects, even in relatively high doses. In this specific phase I trial, the maximum tolerated dose (MTD) was set at 3.6 mg/kg every three weeks. At that dose level, 5 out of 15 patients who received Herceptin-DM1 had a partial response (tumor load went down at least 50% and stayed in remission for at least 6 weeks). Actually, another patient who received a lower dose of 2.4 mg/kg also had a partial response, so if we include her as well, the objective response rate for the two doses is 37.5%.

Since the patients had stopped responding to naked Herceptin, we can safely assume that the broad clinical effect was a result of the potent DM1 infiltrating into the cancer cells following the binding of the Herceptin moiety. Based on historical figures, the overall amount of DM1 that was used in this trial could not have led to this clinical response on its own, so we know the DM1 was targeted to tumors specifically.

In addition, Herceptin-DM1 had a favorable safety profile, since a clinical effect was achieved with relatively minor side effects. This implies the linker which glue the antibody to the drug is fairly stable in the blood stream.

Finally, the patients who participated in this trial had undergone numerous chemotherapy treatments and saw their cancer relapse prior to receiving Herceptin-DM1. Thus, their disease was in a very advanced and aggressive mode. It is likely that the drug would be more effective in earlier disease stages and less pretreated patient population. Although we view these results as very positive, we must admit we had expected a more potent activity by this promising candidate.

The reason for our extremely high expectations was the high potency of DM1 and promising pre-clinical results of Herceptin-DM1. When Herceptin-DM1 and Herceptin were evaluated for the treatment of mice bearing Herceptin-resistant tumors, Herceptin alone had no effect on tumor growth, while Herceptin-DM1 caused >90% tumor reduction in all mice examined. In addition, earlier pre-clinical studies showed that DM1 conjugates were +1000-fold more potent than naked Herceptin against breast cancer cell lines. Herceptin is dosed at 2 mg/kg per week, while in the phase I trial, T-DM1 was injected every 3 weeks at a dose of 3.6 mg/kg. This puts Herceptin-DM1’s clinical activity in a somewhat unflattering light.

Make no mistake, Herceptin-DM1 still has very promising prospects as it managed to show a significant effect where all other alternatives failed. Obviously, small phase I trials’ results are not reliable for deciding whether a drug candidate is effective or not. Still, the fact that the candidate had an effect among 37.5% of Herceptin-resistant patients is an extremely important indication. Although not as bright as we had expected, Herceptin-DM1 is still the jewel in the crown of the cancer antibodies field.

Immunogen’s Business Model

Immunogen realized that the critical point in developing ADCs is the linker that conjugates the antibody to the chemo drug. There are plenty of antibodies that target cancer cells specifically as well as plenty of effective chemo agents, but the biggest challenge is gluing them together. Most importantly, for the drug to be safe, the linker must be very stable inside the blood stream. Then, in order for it to be effective, the drug must be released in its active form once inside the cancer cell. It might sound simple in theory but doing it properly is anything but simple, and for that reason, we believe that Immunogen’s proprietary technology is very appealing.

Unlike other groups who develop ADCs, Immunogen does not use traditional chemotherapy drugs such as Taxol and Doxorubicin, but decided to use derivatives of maytansine, which is a much more powerful agent. Because maytansine is such a toxic compound, it cannot be used “as is” due to unbearable side effects. However, when properly linked to an antibody, such a deadly compound may even do a better job killing cancer cells. The derivatives used by Immunogen are patented and can be linked to antibodies via various mechanisms, which should be tailored for each case individually.

Investors should take note of the company’s attractive business model, where it develops its own agents on top of licensing its technology to other companies. In an industry where most products fail, it is crucial for any drug development company to be involved in as many projects as possible in order to reduce the risks involved. Immunogen is engaged in the development of its own ADCs and currently has 2 such agents in clinical trials. In addition, they license their products and technology to other companies such as Genentech (DNA) and Sanofi-Aventis (SNY). Such partnerships usually involve milestone payments of several tens of millions per product, manufacturing and R&D costs coverage and royalties from future sales. A small company such as Immunogen is limited in the resources it can allocate to each clinical program. Therefore, we see such collaborations as an ideal strategy, which enables the development of a large number of candidates based on Immunogen’s technology, with all the development and clinical costs being covered by large partners. Furthermore, the milestone and R&D payments it receives from its partners decreases the need for additional fund raising and dilution, throughout the clinical evaluation process.

Owing to its strategy, Immunogen has an impressive pipeline, with five candidates in clinical development and many more in pre-clinical stages. Notably, only two of the five candidates are exclusively owned and developed by Immunogen (huC242-DM4 and huN901-DM1) with the rest developed and financed by its partners (Herceptin-DM1, in development by Genentech; AVE9633 and AVE1642, in development by Sanofi-Aventis).


Author is long IMGN