Why Shares of ImmunoGen Inc. Shot Up Today

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What happened

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ImmunoGen (NASDAQ: IMGN) ended Friday up 14% after reporting second-quarter earnings earlier in the day. Of course, it wasn't the cancer-focused biotech's earnings that caused shares to jump by double digits, since the company doesn't currently sell any drugs.

So what

For the record, revenue came in at $39 million, most of which was from a previously disclosed $30 million payment from Sanofi (NYSE: SNY). The companies amended their agreement over isatuximab and three other earlier-stage drug candidates so ImmunoGen could get cash now in exchange for royalties later.

So while ImmunoGen's $8.9 million loss for the second quarter might at first glance appear to be significantly less than the $45.9 million it lost in Q2 2016, it wasn't not that different if you factor out the payment from Sanofi.

With the cash infusion, plus some other cash from another deal, management updated its expectations for its balance sheet: It now expects to end the year with between $90 million and $95 million in the bank, which management forecasts will fund the company into the second half of 2018.

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Now what

Nothing in today's report seems to justify a double-digit gain in ImmunoGen's stock price, but such moves are not unusual for this company, which seems to be trading at the whim of day traders' momentum plays. Long-term investors can ignore today's move and focus on the phase 3 Forward I trial testing mirvetuximab soravtansine in patients with ovarian cancer.

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Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends ImmunoGen. The Motley Fool has a disclosure policy.