I do agree that IMGN created some confusion with the change in trial design, but on a positive side, they've gained sufficient information from a Phase I/II Trial to go directly to a Phase III Trial, that's a pretty strong statement of their belief in the drug.
Yes, the Phase III approach will take longer, and it will cost more; however, it will also give them a much larger target market on approval. You'll find that in the conference call.
I believe IMGN is greatly oversold based on both the confusion, but also largely on missing consensus and issuing new financial guidance saying that annual losses would be slightly greater than previously established guidance.
Like many others, I view SGEN as IMGN's closest competitor and cannot explain how SGEN's market cap can be over eight times that of SGEN. Historically IMGN has traded for half or more the market cap of SGEN, on occasion it has been higher. I'm not suggesting SGEN is over priced, but that IMGN is drastically under valued by comparison.
By late this year, if they do initiate the Phase III Trial, I believe that IMGN will end the year at new highs and perhaps reach the point where its market cap is no more than half that of SGEN's.
Gary
