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Wednesday September 01, 2010
Immunogen (IMGN): Bad news biotech buy?
by John McCamant, editor The Medical Technology Stock Letter  ImmunoGen (IMGN) saw a huge decline after they and Roche announced they have received a Refuse to File (RTF) letter from the FDA.The refusal letter was for the accelerated approval of the Biologic License Application (BLA) for trastuzumab-DM1, or T-DM1, submitted in July 2010. Genentech also stated that as planned, it will continue with its ongoing Phase III registrational T-DM1 trial, known as EMILIA, and that it will continue to work with the FDA and expects to submit a new T-DM1 BLA in mid-2012. 
Roche noted that in its review of the BLA, the FDA stated that the T-DM1 trials did not meet the standard for accelerated approval because all available treatment choices approved for metastatic breast cancer, regardless of HER2 status, had not been exhausted in the study population. The refusal is partially the result of Roche’s hubris as they have aggressively stated at recent investor meetings that T-DM1 filing was basically a slam dunk for acceptance by the FDA. We need to remember that Genentech no longer exists and is now a Swiss global Pharma company. The merged company does not possess DNA’s historic expertise in oncology due to the flight of the best Genentech employees since the hostile takeover. This FDA move also sends a signal to cancer drug developers that they had better have a truly refractory patient population before filing for accelerated approval. This FDA action is a potential negative for ONXX’s carfilzomib which is expected to be filed for accelerated FDA approval for refractory myeloma patients. While this delay is significant, we believe the market has over-reacted as T-DM1 is still clearly a potential block-buster cancer drug. We are lowering our buy limit to $7 to reflect the delay. Our $17 target remains unchanged as we would not be surprised to see the company bought at a large premium after the dusts settles. IMGN is a now a buy under $7. Learn more about this financial newsletter at John McCamant's The Medical Technology Stock Letter. |
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