Why ImmunoGen’s Secondary Makes Sense

By Chris Lange Updated Jan 12, 7:29AM EST · Published Oct 5, 9:55AM EDT

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Why ImmunoGen’s Secondary Makes Sense — © Thinkstock

ImmunoGen Inc. (NASDAQ: IMGN) saw its shares make a sharp turn downward early Thursday morning after the stock has seen an incredible year of trading so far. Shares taking a step back in this case makes a lot of sense as the company is conducting a secondary offering after its stock has nearly quadrupled this year, Considering this success, when would be a better time to conduct a secondary?

Looking at the chart, one sees that shares are up about 283% year to date, though over the past 52 weeks the stock is only up 200%.

In terms of the offering, the company said that it intends to offer and sell 13.0 million shares of common stock, with an overallotment option for an additional 15% of shares — or 1.95 million shares.

The underwriters for the offering are Jefferies, Leerink Partners, RBC Capital Markets and Canaccord Genuity.

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This is a biotechnology company that is progressing toward becoming a fully integrated company delivering innovative antibody-drug conjugate (ADC), therapies that meaningfully improve the lives of people with cancer. An ADC with its proprietary technology comprises an antibody that binds to a target found on tumor cells and is conjugated to one of ImmunoGen’s potent anti-cancer agents as a “payload” to kill the tumor cell once the ADC has bound to its target. ADCs are an important and expanding approach to the treatment of cancer, with four approved products and the number of agents in development growing significantly in recent years.

The company intends to use the net proceeds of the offering, together with its existing capital, to fund its operations, including, but not limited to, research and development activities, clinical trial activities, manufacturing and supply of drug substance and drug products, commercialization preparation, acquisitions of new technologies, capital expenditures and working capital.

Shares of ImmunoGen were down over 8% at $7.15 in early trading indications Thursday, but were only down 3% at $7.59 shortly after the opening bell. The consensus analyst price target is $9.50, and a 52-week trading range is $1.51 to $8.84.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.