IMMUNOGEN INC
`
`FORM 10-K
`
`(Annual Report)
`
`Filed 08/28/14 for the Period Ending 06/30/14
`
`
`Address
`
`
`830 WINTER ST
`WALTHAM, MA 02451
`(781)895-0600
`Telephone
`0000855654
`CIK
`IMGN
`Symbol
`2834 - Pharmaceutical Preparations
`SIC Code
`Biotechnology & Drugs
`Industry
`Sector Healthcare
`Fiscal Year
`06/30
`
`http://www.edgar-online.com
`© Copyright 2014, EDGAR Online, Inc. All Rights Reserved.
`Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
`
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`Use these links to rapidly review the document
`TABLE OF CONTENTS
`TABLE OF CONTENTS1
`
`Table of Contents
`
`
`
`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`
`Form 10-K
`
`(cid:1) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
`ACT OF 1934
`
`
`For the fiscal year ended June 30, 2014
`
`OR
`
`
`TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
`EXCHANGE ACT OF 1934
`
`
`For the transition period from to
`
`
`
`
`
`
`
`
`Commission file number 0-17999
`
`ImmunoGen, Inc.
`
`
`
`04-2726691
`(I.R.S. Employer
`Identification No.)
`
`Massachusetts
`(State or other jurisdiction
`of incorporation or organization)
`
`
`830 Winter Street, Waltham, MA 02451
`(Address of principal executive offices, including zip code)
`
`(781) 895-0600
`(Registrant's telephone number, including area code)
`
`Securities registered pursuant to Section 12(b) of the Act:
`
`Title of Each Class
`Common Stock, $.01 par value
`
`
`
`
`
`Name of Each Exchange on Which Registered
`NASDAQ Global Select Market
`
` Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. (cid:1) Yes
` No
`
` Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:1)
` No
`
` Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
`Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
`(2) has been subject to such filing requirements for the past 90 days. (cid:1) Yes No
`
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` Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive
`Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding
`12 months (or for such shorter period that the registrant was required to submit and post such files). (cid:1) Yes No
`
` Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
`contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by
`reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:1)
`
` Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
`company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
`(Check one):
`
`Large accelerated filer (cid:1)
`
`Accelerated filer
`
`Non-accelerated filer
`(Do not check if a smaller reporting company)
`
`
`
`Smaller reporting company
`
` Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes (cid:1) No
`
` Aggregate market value, based upon the closing sale price of the shares as reported by the NASDAQ Global Select Market, of voting
`stock held by non- affiliates at December 31, 2013: $1,252,547,383 (excludes shares held by executive officers and directors). Exclusion of
`shares held by any person should not be construed to indicate that such person possesses the power, direct or indirect, to direct or cause the
`direction of management or policies of the registrant, or that such person is controlled by or under common control with the registrant.
`Common Stock outstanding at August 20, 2014: 85,907,896 shares.
`
`DOCUMENTS INCORPORATED BY REFERENCE
`
` Portions of the definitive Proxy Statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be
`held on November 11, 2014 are incorporated by reference into Part III.
`
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`Table of Contents
`
`Item
`
`
`
`
`
`Business
`1.
`1A. Risk Factors
`1B. Unresolved Staff Comments
`2.
` Properties
`3.
` Legal Proceedings
`3.1 Executive Officers of the Registrant
`4.
` Mine Safety Disclosures
`
`
`ImmunoGen, Inc.
`Form 10-K
`
`TABLE OF CONTENTS
`
`
`Part I
`
`Part II
`
`
`
`5.
`
`6.
`7.
`
`Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
`Purchases of Equity Securities
` Selected Financial Data
` Management's Discussion and Analysis of Financial Condition and Results of
`Operations
`7A. Quantitative and Qualitative Disclosures About Market Risk
`8.
` Financial Statements and Supplementary Data
`9.
` Changes in and Disagreements with Accountants on Accounting and Financial
`Disclosure
`9A. Controls and Procedures
`9B. Other Information
`
`
`Part III
`
`
`
`Directors, Executive Officers and Corporate Governance
`10.
`11. Executive Compensation
`12. Security Ownership of Certain Beneficial Owners and Management and Related
`Stockholder Matters
`13. Certain Relationships and Related Transactions, and Director Independence
`14. Principal Accounting Fees and Services
`
`
`15.
`
`
`
`
`
`Part IV
`
`Exhibits, Financial Statement Schedules
`
`Signatures
`
`2
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`Item 1. Business
`
` In this Annual Report on Form 10-K, ImmunoGen, Inc. (ImmunoGen, Inc., together with its subsidiaries, is referred to in this document as
`"we", "us", "ImmunoGen", or the "Company"), incorporates by reference certain information from parts of other documents filed with the
`Securities and Exchange Commission. The Securities and Exchange Commission allows us to disclose important information by referring to it
`in that manner. Please refer to all such information when reading this Annual Report on Form 10-K. All information is as of June 30, 2014
`unless otherwise indicated. For a description of the risk factors affecting or applicable to our business, see "Risk Factors," below.
`
`Overview
`
` We are a biotechnology company that develops targeted anticancer therapeutics. All of our wholly owned clinical and preclinical product
`candidates are antibody-drug conjugates, or ADCs. An ADC is a type of medicine that uses a monoclonal antibody to deliver a therapeutic
`agent to targeted cells.
`
` We developed our ADC technology to enable the creation of highly effective, well-tolerated anticancer products. An ADC with our
`technology comprises an antibody that binds specifically to an antigen target found on the surface of cancer cells with one of our potent cancer-
`cell killing agents, or payloads, attached to the antibody using one of our engineered linkers. An ADC compound's antibody component enables
`it to bind to cancer cells that have its antigen on their surface and the payload agent serves to kill these cancer cells. We have tubulin-acting
`payload agents, such as DM1 and DM4, which are maytansinoids, and, more recently, we developed DNA-acting payload agents, such as
`DGN462, which we call IGNs. Our linkers are engineered to keep our payload agents securely attached to the antibody while traveling through
`the bloodstream and then control its release and activation once inside a cancer cell. The antibody component of an ADC may serve only as a
`targeting vehicle or it may also have anticancer activity, depending on the antigen target and the antibody selected.
`
` We develop our own product candidates using our ADC technology. We now have three wholly owned, clinical-stage anticancer
`compounds—IMGN853, IMGN289, and IMGN529—and have reported preclinical data for IMGN779, which we expect to be our next
`clinical-stage compound. IMGN779 is the first ADC with our IGN technology. We license to other companies limited rights to use our ADC
`technology with their antibodies to create products. The most advanced compound with our ADC technology is Roche's marketed product,
`Kadcyla® (ado-trastuzumab emtansine). Kadcyla was first commercialized in early 2013 and we began earning royalties on Kadcyla sales at
`that time. Seven other ADC compounds and one non-ADC, or "naked," antibody product candidate are in clinical testing through our
`partnerships. Our partnership agreements entitle us to earn milestone payments with agreed-upon achievements and, for therapies successfully
`developed and commercialized, royalties on product sales. Our current partners are: Amgen Inc., Bayer HealthCare (a subgroup of Bayer AG),
`Biotest AG, Eli Lilly and Company, or Lilly, Novartis Institutes for BioMedical Research, Inc., or Novartis, the Roche Group and Sanofi. We
`also have a research agreement with CytomX Therapeutics that allows each company to develop probody-drug conjugates against a specified
`number of cancer targets using CytomX's Probody ™ antibody masking technology with our payload agents and engineered linkers.
`
` We were organized as a Massachusetts corporation in 1981. Our principal offices are located at 830 Winter Street, Waltham,
`Massachusetts (MA) 02451, and our telephone number is 781-895-0600. We maintain a website at www.immunogen.com , where certain
`information about us is available. Please note that information contained on the website is not a part of this document. Our Annual Reports on
`Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports are available free of charge
`through the "Investor Information" section of our website as soon as reasonably practicable after those materials have been electronically filed
`with, or furnished to, the Securities and Exchange Commission. We have adopted a Code of Corporate Conduct that applies
`
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`to all our directors, officers and employees and a Senior Officer and Financial Personnel Code of Ethics that applies to our senior officers and
`financial personnel. Our Code of Corporate Conduct and Senior Officer and Financial Personnel Code of Ethics are available free of charge
`through the "Investor Information" section of our website.
`
`Pipeline: Wholly Owned and Partner Product Candidates
`
` Listed in the tables below are the disclosed compounds in development through our own programs and our collaborations with other
`companies. All of these compounds are ADCs with the exception of SAR650984, which is a therapeutic antibody, and all of these compounds
`are in early clinical testing (Phase I and/or Phase II) with the exception of Kadcyla, which is marketed, and IMGN779, which is in preclinical
`testing. Additional earlier-stage compounds are in development by us and several of our partners. The results in early clinical trials may not be
`predictive of results obtained in subsequent clinical trials and there can be no assurance that any of our or our collaborators' product candidates,
`other than Kadcyla, will advance or will demonstrate the level of safety and efficacy necessary to obtain regulatory approval.
`
`
`Compounds Wholly Owned by ImmunoGen
`
`Compound
`IMGN853
`IMGN289
`IMGN529
`IMGN779
`
`Lead Indication(s)
`
` Ovarian cancer, endometrial cancer
` Head and neck cancers, non-small cell lung cancers
` Non-Hodgkin lymphoma
` Acute myeloid leukemia
`
`
`
`
`
`
`
`Target
`Folate receptor a
`EGFR
`CD37
`CD33
`
`
`Collaborative Partner Compounds
`
`Lead Indication(s)
`Compound
`
`Kadcyla
` Previously treated HER2-positive metastatic breast cancer
`AMG 172
` Kidney cancer
`AMG 595
` Glioblastoma
`BAY 94-9343 Mesothelioma, ovarian cancer
`BT-062
` Multiple myeloma, breast, bladder cancers
`SAR3419
` Diffuse large B-cell lymphoma
`SAR650984
` Multiple myeloma
`SAR566658
` Solid tumors
`SAR408701
` Solid tumors
`
` Partner
`Target
`
` Roche
`HER2
`
` Amgen
`CD70
`
` EGFRvIII Amgen
` Mesothelin Bayer
`
`CD138
` Biotest
`
`CD19
` Sanofi
`
`CD38
` Sanofi
`
`CA6
` Sanofi
` CEACAM5 Sanofi
`
`IMGN853
`
` We created our IMGN853 product candidate as a treatment for ovarian cancer, endometrial cancer, and potentially other cancers that
`highly express folate receptor a
`, or FR a
`. This ADC comprises a FR a -binding antibody with our potent DM4 payload agent attached using
`one of our engineered linkers.
`
` IMGN853 is currently in Phase I clinical testing. During the initial dose-finding clinical research, IMGN853 was found to be generally
`well tolerated and to demonstrate evidence of anticancer activity. In July 2014, it was granted orphan drug status for ovarian cancer by the US
`FDA.
`
` IMGN853 is now beginning assessment specifically for the treatment of FR a -positive platinum-resistant ovarian cancer and relapsed
`endometrial cancer. In this assessment, IMGN853 is being dosed once every three weeks. ImmunoGen research has indicated that dosing
`IMGN853 more frequently could further enhance efficacy without reducing tolerability, and dose finding is now underway with
`
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`IMGN853 dosed weekly for three weeks followed by one week without treatment. ImmunoGen plans to select between these two schedules for
`more advanced IMGN853 clinical trials.
`
`IMGN289
`
` Our EGFR-targeting ADC, IMGN289, is a potential new treatment for cancers that highly express EGFR. These include squamous cell
`carcinoma of the head and neck, or SCCHN, and types of non-small cell lung cancer (NSCLC), including both squamous cell and non-
`squamous cell NSCLCs. IMGN289 comprises an ImmunoGen EGFR-binding antibody with our DM1 payload agent attached using one of our
`engineered linkers. In preclinical testing, the antibody component of IMGN289 was found to have meaningful anticancer activity against
`EGFR-positive cancer cells sensitive to EGFR inhibition. In these preclinical studies, the full product candidate, inclusive of the DM1,
`demonstrated superior activity against these cancers and also against EFGR-positive cancers not sensitive to EGFR inhibitors. This is attributed
`to the DM1 being able to kill EGFR-positive cancer cells through its mechanism, interference with tubulin formation, that is independent of the
`EGFR pathway.
`
` IMGN289 advanced into clinical testing in late 2013. It is currently in the dose-finding portion of a Phase I clinical trial and no clinical
`data has been reported.
`
`IMGN529
`
` Our IMGN529 ADC is a potential new treatment for cancers that highly express CD37, such as non-Hodgkin lymphoma, or NHL, and
`chronic lymphocytic leukemia. ImmunoGen scientists have found the expression profile of CD37 on NHL subtypes to be similar to that of
`CD20, the target of Roche's Rituxan® (rituximab).
`
` IMGN529 comprises an ImmunoGen CD37-targeting antibody with our DM1 payload agent attached using one of our engineered linkers.
`In preclinical testing, the antibody demonstrated notable anticancer activity that was further enhanced by the addition of the DM1. IMGN529 is
`currently in the dose-finding portion of a Phase I clinical trial assessing it in patients with NHL previously treated with other anticancer agents.
`Initial evidence of anticancer activity has been reported with IMGN529.
`
`IMGN779
`
` Preclinical-stage IMGN779 is a potential new treatment for acute myeloid leukemia. It comprises an ImmunoGen CD33-targeting
`antibody with one of our DNA-acting payload agent, DGN462, attached using one of our engineered linkers. We currently intend to submit an
`Investigational New Drug, or IND, application for it to the FDA during the latter half of 2015.
`
`Kadcyla (previously referred to as T-DM1)
`
` Kadcyla is a HER2-targeting ADC that comprises trastuzumab, which is the active component of Roche's antibody therapeutic,
`Herceptin® (trastuzumab), with our DM1 payload agent attached using one of our engineered linkers. Roche has global development and
`commercialization rights for Kadcyla under an ADC technology license from us.
`
` Kadcyla was granted marketing approval in February 2013 by the U.S. Food and Drug Administration, or FDA, for the treatment of
`HER2-positive metastatic breast cancer in patients who previously received Herceptin and a taxane. It was approved for this use in Japan and in
`the European Union (EU) in September 2013 and November 2013, respectively. In some countries, such as the US, Kadcyla was able to be
`launched shortly after gaining marketing approval. In other countries, it is necessary to negotiate pricing with governmental authorities prior to
`launch. For example, Kadcyla was launched in Japan in April 2014 after such negotiations.
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` Roche is developing Kadcyla for a number of additional uses, and currently has Phase III, or registration, trials underway assessing
`Kadcyla as a therapy for patients with:
`
`•
`
`•
`
`•
`
`Metastatic HER2-positive breast cancer not previously been treated—Roche is assessing Kadcyla for this use in its MARIANNE
`trial. Roche has announced that it intends to use MARIANNE results, if favorable, to apply in 2015 for marketing approval of
`Kadcyla for this use.
`
`Early stage HER2-positive breast cancer—Roche has initiated three Phase III trials in this setting: its KATHERINE trial
`evaluates Kadcyla for the treatment of patients with residual invasive disease following pre-operative therapy; its KAITLIN trial
`assesses Kadcyla for adjuvant use; and its KRISTINE trial evaluates Kadcyla in the neoadjuvant setting.
`
`Advanced HER2-positive gastric cancer—Roche is evaluating Kadcyla for this use in its GATSBY trial. Roche has announced
`that it intends to use the results from GATSBY, if favorable, to apply in 2015 for marketing approval for this use.
`
`Other Clinical-stage Compounds in Development by Our Partners
`
` In addition to Kadcyla, eight other compounds are in clinical testing through our collaborations with other companies. In alphabetical
`order, these are:
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`AMG 172— This CD70-targeting ADC was created by Amgen under a license from ImmunoGen. It is currently in Phase I
`clinical testing for the treatment of patients with clear cell renal cell carcinoma. To our knowledge, no clinical data has been
`reported with AMG 172 to date.
`
`AMG 595— This EGFRvIII-targeting ADC also was created by Amgen under a license from ImmunoGen. It is currently in
`Phase I clinical testing for the treatment of patients with glioblastoma and initial evidence of activity has been reported.
`
`BAY 94-9343— This mesothelin-targeting ADC was created by Bayer under a license from ImmunoGen. Initial evidence of
`activity in mesothelioma has been reported. BAY 94-9343 is currently being assessed for the treatment of mesothelioma and
`ovarian cancer in early clinical trials.
`
`BT-062— This CD138-targeting ADC was created by Biotest under a license from ImmunoGen. We have opt-in rights for co-
`development and co-commercialization of BT-062 with Biotest in the U.S. Encouraging findings with BT-062 in the treatment
`of multiple myeloma have been reported, both with the agent used alone and as part of a combination treatment regimen, and its
`development for this cancer is ongoing. The target for BT-062 also has been found to occur on several types of solid tumors, and
`in early 2014 this ADC began clinical testing for the treatment of triple-negative breast cancer and metastatic urinary bladder
`cancer.
`
`SAR3419— This CD19-targeting ADC was initially created by ImmunoGen and licensed to Sanofi as part of a broad research
`collaboration. In Phase II clinical testing, SAR3419 showed what was concluded to be proof-of-concept efficacy as
`monotherapy in the treatment of diffuse large B-cell lymphoma, a difficult-to-treat lymphoma, in patients whose cancer had
`returned after treatment with other agents. These findings were reported at the annual meeting of the American Society of
`Clinical Oncology, or ASCO, in June 2014.
`
`SAR650984— This product candidate is CD38-targeting therapeutic, or "naked", antibody initially created by ImmunoGen and
`licensed to Sanofi as part of a broad research collaboration. SAR650984 has shown promising activity in early clinical testing
`when used alone or as part of a combination regimen to treat patients with previously treated multiple myeloma. Sanofi has
`begun Phase II testing of SAR650984 for multiple myeloma.
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`•
`
`•
`
`SAR566658— This CA6-targeting ADC also was initially created by ImmunoGen and licensed to Sanofi as part of a broad
`research collaboration. It is currently in Phase I clinical testing for the treatment of CA6-positive solid tumors, such as ovarian
`cancer, with initial evidence of activity reported.
`
`SAR408701— This CEACAM5-targeting ADC was initially created by ImmunoGen and licensed to Sanofi as part of a broad
`research collaboration. Patient enrollment has opened in the first SAR408701 clinical trial.
`
` Earlier-stage ADCs are in development through our collaborations with Amgen, CytomX, Lilly, Novartis, and Sanofi.
`
`Incidence of Relevant Cancers
`
` Cancer remains a leading cause of death worldwide, and is the second leading cause of death in the U.S. The American Cancer Society, or
`ACS, estimates that in 2014 approximately 1.7 million new cases of cancer will be diagnosed in the U.S. and that approximately 586,000
`people will die from the disease. The total number of people living with cancer significantly exceeds the number of patients diagnosed with
`cancer in a given year as patients can live with cancer for a year or longer. Additionally, the potential market for anticancer drugs exceeds the
`number of patients treated as many types of cancer typically are treated with multiple compounds at the same time and because patients often
`receive a number of drug regimens sequentially.
`
` Below is information about incidence of cancers we are seeking to treat with our wholly owned compounds. In our clinical testing, we will
`define treatment subgroups of patients for the cancer types referenced.
`
` IMGN853 —Our IMGN853 compound is a potential treatment for epithelial ovarian cancer, endometrial cancer and potentially other
`cancers that highly express its target, FR a
`. Based on published sources, we believe approximately 22,000 new cases of ovarian cancer will be
`diagnosed in the US in 2014 and epithelial ovarian cancer accounts for approximately 85% to 90% of these ovarian cancer cases. We believe
`that approximately 52,600 cases of endometrial cancers will be diagnosed in the US in 2014.
`
` IMGN289 —Our IMGN289 compound is a potential treatment for many cases of head and neck cancer and types of NSCLC. The ACS
`estimates that approximately 55,000 new cases of head and neck cancers will be diagnosed in 2014. Research conducted at ImmunoGen found
`that over 90% of these types of cancer strongly express EGFR. Based on ACS estimates, we believe approximately 191,000 new cases of
`NSCLC will be diagnosed in the U.S. in 2014. This figure comprises three main subtypes—adenocarcinoma, squamous cell carcinoma, and
`large cell carcinoma. These subtypes account for approximately 40%, 25-30%, and 10-15% of NSCLC diagnoses, respectively. Research with
`tumor samples conducted at ImmunoGen found that approximately 20% of adenocarcinoma cases and about half of squamous and of large cell
`carcinoma cases strongly express EGFR.
`
` IMGN529 —We are assessing our IMGN529 compound for the treatment of NHL. Based on ACS estimates, we believe approximately
`70,800 new cases of NHL will be diagnosed in the U.S. in 2014.
`
` IMGN779 —Our preclinical IMGN779 compound is a potential treatment for acute myeloid leukemia, or AML. Based on ACS estimates,
`we believe approximately 18,900 new cases of AML will be diagnosed in the U.S. in 2014.
`
`Out-licenses and Collaborations
`
` We selectively license restricted access to our ADC technology to other companies to provide us with cash to fund our own product
`programs and to expand the utilization of our technology. These
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`agreements typically provide the licensee with rights to use our ADC technology with its antibodies or related targeting vehicles to a defined
`target to develop products. The licensee is generally responsible for the development, clinical testing, manufacturing, registration and
`commercialization of any resulting product candidate. As part of these agreements, we are generally entitled to receive upfront fees, potential
`milestone payments, royalties on the sales of any resulting products and research and development funding based on activities performed at our
`collaborative partner's request. We are also compensated for preclinical and clinical materials supplied to our partners.
`
` We only receive royalty payments from our out-licenses after a product candidate developed under the license has been approved for
`marketing and commercialized. Additionally, the largest milestone payments under our existing collaborations usually are on later-stage events,
`such as commencement of pivotal clinical trials, product approval and achievement of defined annual sales levels. Achievement of product
`approval requires, at a minimum, favorable completion of preclinical development and evaluation, assessment of early-stage clinical trials,
`advancement into pivotal Phase II and/or Phase III clinical testing, completion of this later-stage clinical testing with favorable results, and
`completion of regulatory submissions and a positive regulatory decision. We have a license with Roche relating to Kadcyla that provides us
`with royalty revenue and may provide us with additional milestone payments. Kadcyla is currently our only source of royalty revenue. Below is
`a table setting forth our active agreements and current status of the product candidates being developed thereunder:
`
`Partner
`Roche (2)
`
`Amgen (3)
`
`Sanofi
`
`Sanofi (4)
`
`Biotest
`
`Bayer HealthCare
`
`Novartis (4)
`
`Lilly (4)
`
`CytomX
`
`Agreement Type
`
`
` Multiple single-targets
`
`
`
`
`
`Multiple single-targets
`
`
`
`
`
`Multiple single-targets
`
`
`
`
`
`Right-to-test
`
`
`
`
`
`Single-target
`
`
`
`
`
`Single-target
`
`
`
`
`
`Right-to-test
`
`
`
`
`
`Right-to-test
`
`
`
`
`
`Right-to-test
`
`Effective Date(s)
`2000
`
`2000
`
`2003
`
`2006
`
`2006
`
`2008
`
`2010
`
`2011
`
`2014
`
`Development Status (1)
`
` Marketed
`
`
`
`Phase I
`
`
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`Phase II
`
`
`
`Research/Preclinical
`
`
`
`Phase I
`
`
`
`Phase I
`
`
`
`Research/Preclinical
`
`
`
`Research/Preclinical
`
`
`
`Research/Preclinical
`
`(1)
`
`(2)
`
`(3)
`
`(4)
`
`For agreements involving multiple targets, development status denotes the most advanced program under the
`collaboration.
`
`Roche has five single-target licenses. Pursuant to the license covering the target HER2, which was entered into in 2000, a
`product candidate, Kadcyla, has received marketing approval in the US, Japan and the EU, along with various other
`countries. The remaining four licenses were taken between 2005 and 2008 under another agreement established in 2000,
`and the development status of product candidates under each of those licenses is research/preclinical.
`
`Amgen has four exclusive, single-target licenses, one of which has been sublicensed by Amgen to Oxford
`BioTherapeutics Ltd.
`
`Sanofi, Novartis and Lilly each have the right to take a defined number of exclusive, single-target options that provide the
`right to take a defined number of single-target licenses, on pre-negotiated terms, to specified targets during the respective
`option periods. As of June 30, 2014, Novartis has taken two exclusive single-target licenses and one license to two related
`targets, one on an exclusive basis and the second on a non-exclusive basis; Lilly has taken an exclusive license to a single
`target; and, Sanofi has taken an exclusive license to a single target.
`
`8
`
`IMMUNOGEN 2199, pg. 10
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`Table of Contents
`
`Roche
`
` In May 2000, we granted Genentech, now a unit of Roche, an exclusive development and commercialization license to use our
`maytansinoid ADC technology with antibodies, such as trastuzumab, or other proteins that target HER2. In February 2013, the US FDA
`granted marketing approval to the HER2-targeting ADC compound, Kadcyla. Roche received marketing approval for Kadcyla in Japan and in
`the EU in September 2013 and November 2013, respectively. It has also received marketing approval in various other countries around the
`world. We received a $2 million upfront payment from Roche upon execution of the agreement. We are also entitled to receive up to a total of
`$44 million in milestone payments, plus tiered royalties on the commercial sales of Kadcyla or any other resulting products as described below.
`To date we have received $34 million of the $44 million in potential milestone payments.
`
` The royalty term is determined on a country-by-country basis, and is initially 10 years from the date of first commercial sale of Kadcyla in
`the country. If, on such 10th anniversary, Kadcyla is covered by a valid claim under any patents controlled by us (excluding patents jointly
`owned by us and Genentech), then royalties remain payable on sales of Kadcyla in that country for an additional 2 years and no more.
`
` The following two territories are used in our agreement with Genentech to determine the Kadcyla sales levels for the calculation of the
`applicable tiered royalty levels: (1) the US and (2) the rest of the world. Royalties on sales of Kadcyla are paid quarterly based on net sales in
`each territory in accordance with a tiered structure calculated separately in each of the two territories as follows:
`
`•
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`•
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`•
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`•
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`3% of net sales up to $250 million in the calendar year;
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`3.5% of net sales above $250 million and up to $400 million in the calendar year;
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`4% of net sales above $400 million and up to $700 million in the calendar year; and
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`5% of net sales above $700 million in the calendar year.
`
` Royalties will be reduced to a flat 2% of net sales in any country at any time during the royalty term in which Kadcyla is not covered by a
`valid claim under any patents controlled by us (excluding patents jointly owned by us and Genentech or solely owned by Genentech) in such
`country. The sales in the country count towards the annual sales in that territory for purposes of calculation of sales tiers.
`
` The license agreement also provides for certain adjustments to the royalties payable to us if Genentech makes certain third party license
`payments in order to exploit the ADC technology components of Kadcyla, although such adjustments would in no event reduce the royalties
`payable for any country below the greater of 50% of the royalties otherwise payable with respect to sales of Kadcyla in such country, or 2% of
`net sales in such country. As of the date of this annual report on Form 10-K, we are unaware of any facts or circumstances that would give rise
`to such an adjustment.
`
` Roch