Props to ImmunoGen (IMGN - Get Report) CEO Dan Junius for calling me Tuesday to debate his side of the valuation argument I articulated last Friday. Junius believes I'm undervaluing the royalty stream that will flow directly to ImmunoGen's bottom line (and cash flow) if/when the breast cancer drug T-DM1 is approved. We agreed to disagree, but I'm glad he reached out to make his views known. Junius also made the point that ImmunoGen's drug pipeline, outside of T-DM1, deserves more credit. Again, his point is well taken, except my sense speaking to various investors is that ImmunoGen is still very much a T-DM1 story. The pipeline is too early stage and not moving forward fast enough to generate much interest. ImmunoGen's most advanced internal drug candidate is IMGN1901, only just starting a randomized, controlled phase II study in small cell lung cancer. Results aren't likely to be ready for another 18 months. In terms of partnered drugs, Sanofi (SNY) is moving SAR3419 into a phase II study in lymphoma.
Shal60 takes issue with my contention that Keryx Pharmaceuticals' (KERX - Get Report) phosphate binder Zerenex won't sell well even if approved because dialysis providers operating under the cost constrictions of a "bundled" Medicare reimbursement system will flock to cheaper, generic phosphate binders. Writes Shal60: "The bundling you describe relates to services (dialysis) and injection meds (i.e. Procrit, Venofer), but not oral meds, which are gotten through the individual's prescription plan. The providers don't get any reimbursement for oral meds, so generic versus brand name doesn't really affect the dialysis center/provider. However, with generics available, the insurance co/prescription plans will likely cover the generic, but charge a copay for brand drug."