ImmunoGen Inc (NASDAQ:IMGN) Is Up And Running Again

When we last looked at ImmunoGen Inc (NASDAQ:IMGN), back at the start of July, the company had run from $3.37 a share at the time of our initial highlighting it to our readers to the then current price in and around $7.40 a share.We asked the question, what's next, and we answered with our expectations that we would likely see a near term correction as the shorter term end of markets took profits off the table but that, beyond the correction, we should see a return to the overarching upside momentum in the stock. 1 month chart for IMGNOur thesis was rooted in the fact that the company's pipeline presented numerous opportunities for catalysts across various programs, be these clinical data related or through collaboration agreements.Turns out we were pretty much spot on.ImmunoGen spent the last few weeks declining towards an eventual bottom of $5.42 on August 10, but has since regained much of the lost strength and – on Tuesday this week – ran more than 17% on a fresh input catalyst. And as we expected, the catalyst is rooted in a collaboration, this time with Dublin, Ireland based Jazz Pharmaceuticals plc - Ordinary Shares (NASDAQ:JAZZ).Before we get into the specifics of the deal, it's worth bringing newer readers up to speed. ImmunoGen's potential, and the reason we pinned it as one to watch as far back as March, is rooted in its proprietary Antibody Drug Conjugate (ADC) platform. Basically, antibodies can be used to preferentially bind to cancer cells and ADCs combine cytotoxic drugs (cancer killing drugs, in other words) with these antibodies to create a targeted oncology drug. ImmunoGen's platform can create these ADCs incredibly quickly, so in order to set up collaboration deals like the one just announced with Jazz, all it needs to do is find a company that can create antibodies to be used in the ADC.This makes partnering very quick and easy and makes ImmunoGen something of a unique offering for a biotechnology investor.So, the latest deal will see ImmunoGen pickup $75 million up front from Jazz, with a further $100 million earmarked to be paid by the latter to the former over a seven-year period as underpinning development costs for three individual assets. The deal includes IMGN779, which is currently under investigation as an acute myeloid leukemia treatment, IMGN632, a blood cancer treatment and a third unnamed therapy.ImmunoGen will develop all three drugs until Jazz exercises an opt-in option, at which point ImmunoGen will pick up, and to quote from the disclosure, "mid double digit millions of dollars or low triple digit millions" per drug and take over the program.Again, and as we noted last time, the importance of this sort of deal for ImmunoGen cannot be understated. This is a development stage biotechnology company with a late stage asset currently in a pivotal trial in an oncology indication. The number one risk associated with these companies is dilution. With the upfront $75 million picked up from the Jazz deal and the $30 million received during the second quarter on the back of a Sanofi SA (ADR) (NYSE:SNY) reworking, dilution risk is completely negated this a pure play pivotal exposure. That's rare in biotech and even rarer at the smaller end of the space, so we reiterate our long-term bias as bullish and suggest that any dips or corrections (such as the one that we saw during the first couple of weeks of August subsequent to the most recent swing high) might be nice opportunities pick up exposure to long term upside revaluation at a discount.Check out our previous coverage of this one here.We will be updating our subscribers as soon as we know more. For the latest updates on IMGN, sign up below!Image courtesy of Tony Alter via FlickrDisclosure: We have no position in IMGN and have not been compensated for this article.