Leerink upgraded Immunogen (NASDAQ:IMGN) to “outperform” from “market perform” and raised its price target to $8 from $2 based on a “higher level of conviction” on lead asset, mirvetuximab soravtansine, providing an attractive risk/reward in context of the stock’s current valuation. The stock closed at $3.24 on April 18.
After a major sell-off in 2016, “we think several factors could shift into Immunogen’s favor, resulting in our improved outlook for the stock,” writes analyst Michael Schmidt.
He said the company hired a new CEO, Mark Enyedy, formerly at Shire, who restructured the company in the third quarter last year, resulting in much needed leaner operations focused on lead product candidate, mirvetuximab soravtansine, which is in development as treatment for platinum-resistant ovarian cancer.
The drug is in clinical testing in the Phase 3 FORWARD I trial as a single agent for the treatment of platinum-resistant ovarian cancer.
Mr. Schmidt said the drug has already produced single agent Phase 1b data that are viewed as attractive by MEDACorp ovarian cancer specialists that “we spoke with recently.”
Immunogen has now completed enrolling several additional Phase 1b cohorts in ovarian cancer, evaluating the drug alone or in combination with approved or experimental drugs.
“We think upcoming data presentations from these at ASCO could potentially strengthen the drug’s profile in ovarian cancer further providing a near-term catalyst,” he added.
Mr. Schmidt said that at a current market cap of about $280-million, “we think Immunogen shares are attractively valued, representing the cheapest company with a Phase 3 asset in our coverage universe, with supportive single agent activity.”
