
`
`
`
`
`
`
`
`
`
`
`
`Global Research
`
`11 June 2014
`
`Immunogen Inc
`Looking Beyond Kadcyla: Upgrading to Neutral
`
`
`Transitioning coverage and upgrading to Neutral: Broad pipeline but still early
`Key points from our thesis: [1] Our analysis suggests a bullish outlook on Kadcyla and
`see royalty revenue providing lower-risk valuation support around current levels. We
`now model $9-10/share for Kadcyla alone. [2] While the earlier-stage pipeline programs
`are still high-risk, we see compelling rationale for several of the programs across the
`wholly-owned as well as partnered portfolio. Following encouraging data at the recent
`ASCO conference we see the other programs as promising, and view IMGN289 as the
`most interesting (but still high-risk) wholly-owned program. [3] While we do see
`asymmetric upside from the pipeline, key de-risking events are not expected until 2015,
`suggesting better entry points. We concede that while ph3 MARIANNE data for Kadcyla
`are expected by year-end, expectations are high and are likely priced into shares.
`
`Kadcyla should be a blockbuster, and still is key value driver for IMGN
`We have revised our Kadcyla revenue model and now forecast $3.7bn in un-risk-
`adjusted WW sales by 2018 (vs. $1.5bn previously), with our royalty revenue estimate
`of $110m (-$7m) vs. consensus. Of note, our new model is roughly consistent with our
`UBS colleagues covering Roche, who have a more bullish outlook vs. peers. This
`outlook was confirmed by our own checks that have indicated a positive bias in the
`breast cancer community ahead of the phase-3 MARIANNE study (first-line mBC) as
`well as an overall view that Kadcyla has already moved to become standard of care in
`2nd-line disease. We see Kadcyla as worth $9-10/share, with the lower end of the range
`implying what we think Roche would be willing to pay to recoup the payouts alone.
`
`Implications: We see a longer-term opportunity on pipeline breadth
`Although early and still high risk (which drives our model adjustments), we do see a
`rationale across the portfolio for why the IMGN programs could be successful, and
`therefore include in our new model. However, while valuation may suggest upside,
`with de-risking events weighted to 2015, we see little reason to own near-term.
`
`Valuation: Neutral with a $13 PT by DCF and SOTP (Sell and $8.50 previously)
`Our new price target now includes pipeline credit beyond Kadcyla royalties.
`
`
`
`Equities
`
`Americas
`Biotechnology
`
`
`
`
`
`12-month rating
`
`12m price target
`
`Price
`
`Neutral
`Prior: Sell
`US$13.00
`Prior: US$8.50
`US$12.29
`
`RIC: IMGN.O BBG: IMGN US
`
`
`
`
`
`Trading data and key metrics
`52-wk range
`US$19.67-10.70
`Market cap.
`US$1.04bn
`Shares o/s
`85.0m (COM)
`Free float
`92%
`Avg. daily volume ('000)
`943
`Avg. daily value (m)
`US$12.4
`Common s/h equity (06/14E)
`US$0.09bn
`P/BV (06/14E)
`12.0x
`Net debt / EBITDA (06/14E)
`3.2x
`
`
`
`EPS (UBS, diluted) (US$)
`
`
` 06/14E
`
`From
`To % ch
`(0.13)
`(0.13)
`0.00
`0.04
`0.04
`0.00
`(0.26)
`(0.44)
`-66.45
`(0.44)
`(0.07)
`83.58
`(0.79)
`(0.59)
`25.06
`(1.17)
`(0.68)
`42.23
`(1.00)
`(0.22)
`77.91
`
`Q1
`Q2
`Q3E
`Q4E
`06/14E
`06/15E
`06/16E
`
`
`
`
`Cons.
`(0.13)
`0.04
`(0.44)
`(0.33)
`(0.84)
`(0.89)
`(0.69)
`
`Andrew Peters
`Analyst
`andrew.peters@ubs.com
`+1-212-713 3241
`Matthew Roden, PhD
`Analyst
`matthew.roden@ubs.com
`+1-212-713 2491
`Jeffrey Hung
`Associate Analyst
`jeffrey.hung@ubs.com
`+1-212-713 3982
`
`Highlights (US$m)
`Revenues
`EBIT (UBS)
`Net earnings (UBS)
`EPS (UBS, diluted) (US$)
`DPS (US$)
`Net (debt) / cash
`
`
`
`06/11
`19
`(60)
`(58)
`(0.85)
`0.00
`191
`
`06/12
`16
`(73)
`(73)
`(0.95)
`0.00
`161
`
`06/13
`36
`(73)
`(73)
`(0.86)
`0.00
`195
`
`06/14E
`63
`(51)
`(51)
`(0.59)
`0.00
`151
`
`
`
`06/15E
`71
`(59)
`(59)
`(0.68)
`0.00
`109
`
`06/16E
`127
`(20)
`(19)
`(0.22)
`0.00
`224
`
`06/17E
`177
`15
`15
`0.15
`0.00
`354
`
`06/18E
`215
`39
`39
`0.40
`0.00
`408
`
`06/18E
`06/17E
`06/16E
`06/15E
`06/14E
`06/13
`06/12
`06/11
`Profitability/valuation
`EBIT margin %
`18.2
`8.3
`-15.6
`-83.3
`-81.7
`-205.5
`-447.9
`-311.8
`ROIC (EBIT) %
`(75.5)
`(25.7)
`32.2
`93.6
`76.0
`98.0
`114.2
`202.4
`EV/EBITDA (core) x
`17.0
`38.2
`-59.5
`-16.9
`-18.8
`-15.5
`-11.7
`-8.7
`P/E (UBS, diluted) x
`31.0
`80.9
`(55.5)
`(18.2)
`(20.7)
`(17.1)
`(13.4)
`(10.8)
`Equity FCF (UBS) yield %
`5.0
`2.5
`(0.8)
`(4.3)
`(4.5)
`(5.4)
`(3.8)
`(1.6)
`Net dividend yield %
`0.0
`0.0
`0.0
`0.0
`0.0
`0.0
`0.0
`0.0
`Source: Company accounts, Thomson Reuters, UBS estimates. Metrics marked as (UBS) have had analyst adjustments applied. Valuations: based on an average share price that year, (E): based on a
`share price of US$12.29 on 10 Jun 2014 19:38 EDT
`
`
`www.ubs.com/investmentresearch
`
`This report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON
`PAGE 24. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be
`aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this
`report as only a single factor in making their investment decision.
`
`IMMUNOGEn 2271, pg. 1
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`
`
`Biotest Collaboration
`
`Of the programs in the ImmunoGen pipeline, we view the BT-062 program as the
`most valuable for the company outside of Kadcyla. While encouraging data have
`been presented, the key aspect of this partnership is that ImmunoGen has the
`option to opt-into the development and commercialization of BT-062 in lieu of
`receiving the milestone payments not yet earned and royalties on sales in the US.
`Given that the opt-in may not occur until after early clinical data have been
`reported, we see this as a lower risk opportunity. By receiving a much larger
`portion of the economics (50% profit split), the economics of the Biotest
`agreement is more valuable on a relative basis vs. other programs.
`
`Other collaborations
`
`While we do not currently include other partnered programs in our formal model,
`similar to Sanofi and Biotest, we would expect an upward bias to these estimates
`on positive clinical progress. Notably, two Amgen-partnered clinical programs are
`underway (AMG 172 in clear cell renal cell carcinoma, AMG 595 in glioblastoma),
`with first clinical data and next development milestones likely in 2014. Additional
`partnerships with Lilly and Novartis are still early, and are unlikely to produce
`meaningful catalysts this year, but are important to keep in mind regarding the
`broadness of the partnership landscape.
`
`[3] What is our view on Kadcyla?
`
`We view Kadcyla as the single biggest value driver for IMGN, representing ~54%
`of our new $13 price target. While the economics due to IMGN are indeed
`modest, we agree with the UBS EU pharma analyst that Kadcyla will indeed grow
`to become a multi-blockbuster product, and that it truly represents a significant
`advance in the treatment of HER2+ breast cancer. Key points:
`
` Kadcyla will be a big product, but upside may be limited. Our new
`Kadcyla sales estimates are consistent with the UBS EU pharma team with our
`2014 – 2018 Kadcyla estimates and subsequent royalty revenue due to
`ImmunoGen found in Figure 12 below. We see upward bias to these estimates
`however, as our estimates reflect >70% of worldwide sales coming from the
`U.S. through 2020, which may indeed under-represent the potential adoption
`in the EU and rest of the developed world (RoDW).
`
`Figure 12: UBSe 2014 – 2018 Kadcyla Sales Forecasts and Royalty Revenue to IMGN
`
`US Kadcyla Sales
`growth
`EU Kadcyla Sales
`growth
`ROW Kadcyla Sales
`growth
`Total Kadcyla Sales
`growth
`
`US Royalty Rate
`EU Royalty Rate
`ROW Royalty Rate
`
`Royalty Revenue
`Risk-Adjustment (probability of success)
`Royalty Revenue (risk-adjusted)
`growth
`Source: Company reports, UBS research
`
`2013
`245.5
`
`6.6
`
`2.2
`
`254
`
`3.0%
`3.0%
`3.0%
`
`$7.6
`100%
`$7.6
`
`2014E
`420
`71%
`130
`1854%
`18
`694%
`568
`123%
`
`4.0%
`3.0%
`3.0%
`
`$21.2
`100%
`$21.2
`178%
`
`2015E
`763.8
`82%
`167.1
`29%
`31.6
`80%
`963
`69%
`
`5.0%
`3.0%
`3.0%
`
`$44.2
`100%
`$44.2
`108%
`
`2016E
`1,207.7
`58%
`407.2
`144%
`76.3
`141%
`1,691
`76%
`
`5.0%
`4.0%
`3.0%
`
`$79.0
`75%
`$59.2
`79%
`
`2017E
`1,629.1
`35%
`780.6
`92%
`124.9
`64%
`2,535
`50%
`
`5.0%
`5.0%
`3.0%
`
`$124.2
`75%
`$93.2
`57%
`
`2018E
`1,996.1
`23%
`839.2
`8%
`181.5
`45%
`3,017
`19%
`
`5.0%
`5.0%
`3.0%
`
`$147.2
`75%
`$110.4
`18%
`
`2019E
`2,459.1
`23%
`1,002.0
`19%
`268.3
`48%
`3,729
`24%
`
`5.0%
`5.0%
`3.5%
`
`$182.4
`75%
`$136.8
`24%
`
`2020E
`2,870.0
`17%
`1,262.9
`26%
`399.0
`49%
`4,532
`22%
`
`5.0%
`5.0%
`3.5%
`
`$220.6
`75%
`$165.5
`21%
`
`2021E
`3,171.2
`10%
`1,567.2
`24%
`518.2
`30%
`5,257
`16%
`
`5.0%
`5.0%
`4.0%
`
`$257.6
`75%
`$193.2
`17%
`
`2022E
`3,453.1
`9%
`1,820.7
`16%
`650.7
`26%
`5,925
`13%
`
`5.0%
`5.0%
`4.0%
`
`$289.7
`75%
`$217.3
`12%
`
`
`
` Immunogen Inc 11 June 2014
`
` 15
`
`IMMUNOGEn 2271, pg. 2
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`
`
` The Kadcyla catalyst path may provide asymmetric upside on key data
`read-outs. The phase-3 MARIANNE trial evaluating the use of Kadcyla in
`previously untreated metastatic patients is expected to read-out by year-end
`2014. While the drug has quickly been established as the standard of care in
`second-line disease (following progression on the current standard of care
`Herceptin + Perjeta), the MARIANNE trial could potentially move Kadcyla into
`earlier lines, which should also drive longer duration and a potentially larger
`patient pool. Depending on the degree of separation between the arms it
`would also suggest to us that other ongoing Kadcyla studies are also more
`likely to “win.” Given that a negative study (no difference between arms) is
`unlikely in our view, we see favorable risk/reward heading into the data with a
`positive study likely to drive increased utilization (although already reflected in
`our model), while outright superiority (which we think is a possibility) would
`drive numbers to move even higher.
`
` CLEOPATRA sets a high bar in first line therapy ahead of MARIANNE
`read-out. While our checks with breast cancer experts have been mostly
`positive ahead of the MARIANNE study, the question has generally shifted from
`whether or not the study will be positive (statistically significant difference
`between arms), to if the separation between the Kadcyla-containing arms and
`Herceptin + paclitaxel will be sufficient to drive adoption in the real-world.
`Specifically, given that the treatment landscape has shifted to combination with
`Perjeta since the study was started, the MARIANNE study is not providing a
`head-to-head look vs. the current standard. Without a true head-to-head
`comparison, our discussions have suggested that the degree of separation will
`have to be highly differentiated vs. the phase-3 CLEOPATRA Herceptin +
`Perjeta experience (Figure 13) in order to drive broad front-line utilization.
`Specifically.
`
`Figure 13: CLEOPATRA sets a high bar for MARIANNE data in 2H14
`
`Arm
`
`ORR
`
`PFS
`
`OS
`
`NR
`
`Herceptin + Perjeta + Docetaxel
`
`Herceptin + Placebo + Docetaxel
`
`0.802
`
`0.693
`
`18.5mos
`
`12.4mos
`
`37.6mos
`
`We see favorable risk-reward
`ahead of MARIANNE, but
`favorable uptake already
`reflected in estimates.
`
`While we are positively biased
`ahead of the data, the bar
`remains high in front-line, and
`MARIANNE may have to show
`outsized differentiation to drive
`broad real-world adoption.
`
`Duration of Response
`
`20.2mos
`
`12.5mos
`
`
`
`Source: Company reports and UBS research
`
` Expectations for Kadcyla utilization and MARIANNE. Consistent with our
`EU pharma analyst, we are positively biased ahead of the MARIANNE study, but
`believe the bar and high cost of Kadcyla + Perjecta (likely to be the most
`effective arm) may limit use to monotherpy. As noted in the recent Roche
`initiation: “Consequentially, our model reflects Kadcyla beating H + CT as base
`case, and significant adoption of Kadcyla in the first line, but we model
`declining 1L use of Perjeta in the first-line setting, as more patients receive just
`Kadcyla alone in this setting. “ The key takeaway from this view is that even if
`K + P is the best arm, if Kadcyla alone is superior to Hercpetin, then we would
`assume front line adoption with Herceptin + Perjeta moving to the second line.
`
`[4] How should investors think about platform
`value?
`
`While we assign ~19% of our new $13 price target to the partnered programs
`from Sanofi and Biotest, ImmunoGen is also developing ADCs with Amgen, Bayer,
`
` Immunogen Inc 11 June 2014
`
` 16
`
`IMMUNOGEn 2271, pg. 3
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`
`
`Kadcyla royalty worth at a minimum of ~74% of the current price of ImmunoGen,
`we see that
`
`Figure 18: Kadcyla net present value analysis
`Net Present Value Analysis
`
`Discount Rate
`Terminal Growth Rate
`Terminal Value (total)
`
`Net Enterprise Value
`Net Debt
`Market Capitalization
`Shares Outstanding
`
`NPV (per-share)
`Source: Company reports and UBS research
`
`13%
`0.0%
`
`406
`
`697.5
`
`
`105.3
`
`802.8
`
`85.9
`
`$9.34
`
`
`
`Upside and Downside Scenarios
`
`Upside driven by pipeline, partnership success
`
`Given the heavy risk-adjustment in each of our IMGN product models, we see
`significant upside on de-risking data for each program (especially the wholly-
`owned pipeline). Notably, if we increase our risk-adjustment (probability of
`success) by 15% across each program (while keeping the existing OpEx
`assumptions), our valuaton would move to $20. Further de-risking these programs,
`in a blue-sky scenario suggests a $30+ valuation, or +2x our new $13 price target.
`
`Downside on continued pipeline failure
`
`Our downside scenario reflects failure of the ImmunoGen pipeline programs and is
`driven solely by Kadcyla royalty revenue. On a sum of the parts basis, we value
`Kadcyla worth between $9-10 per share. In a worst-case scenario, we see
`downside at $6 per share, also reflecting lower Kadcyla utilization than our
`admittedly bullish base case assumes.
`
`Upside scenario driven by de-
`risked pipeline data.
`
`Kadcyla provides attractive
`downside protection.
`
`
`
`
`
`
`
` Immunogen Inc 11 June 2014
`
` 20
`
`IMMUNOGEn 2271, pg. 4
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`
`
`
`
`Immunogen Inc (IMGN.O)
`
`Income statement (US$m)
`Revenues
`Gross profit
`EBITDA (UBS)
`Depreciation & amortisation
`EBIT (UBS)
`Associates & investment income
`Other non-operating income
`Net interest
`Exceptionals (incl goodwill)
`Profit before tax
`Tax
`Profit after tax
`Preference dividends
`Minorities
`Extraordinary items
`Net earnings (local GAAP)
`Net earnings (UBS)
`Tax rate (%)
`
`
`
`Per share (US$)
`EPS (UBS, diluted)
`EPS (local GAAP, diluted)
`EPS (UBS, basic)
`Net DPS (US$)
`Cash EPS (UBS, diluted)1
`Book value per share
`Average shares (diluted)
`
`
`
`Balance sheet (US$m)
`Cash and equivalents
`Other current assets
`Total current assets
`Net tangible fixed assets
`Net intangible fixed assets
`Investments / other assets
`Total assets
`Trade payables & other ST liabilities
`Short term debt
`Total current liabilities
`Long term debt
`Other long term liabilities
`Preferred shares
`Total liabilities (incl pref shares)
`Common s/h equity
`Minority interests
`Total liabilities & equity
`
`
`
`06/11
`19
`-
`(55)
`(5)
`(60)
`0
`2
`0
`0
`(58)
`0
`(58)
`0
`0
`0
`(58)
`(58)
`0.0
`
`06/11
`(0.85)
`(0.85)
`(0.85)
`0.00
`(0.78)
`1.86
`68.22
`
`06/11
`191
`10
`202
`13
`0
`3
`218
`15
`0
`15
`0
`63
`0
`78
`140
`0
`218
`
`06/12
`16
`-
`(69)
`(5)
`(73)
`0
`0
`0
`0
`(73)
`0
`(73)
`0
`0
`0
`(73)
`(73)
`0.0
`
`06/12
`(0.95)
`(0.95)
`(0.95)
`0.00
`(0.89)
`1.09
`76.82
`
`06/12
`161
`5
`166
`12
`0
`2
`180
`16
`0
`16
`0
`80
`0
`96
`84
`0
`180
`
`06/13
`36
`-
`(68)
`(5)
`(73)
`0
`0
`0
`0
`(73)
`0
`(73)
`0
`0
`0
`(73)
`(73)
`0.0
`
`06/13
`(0.86)
`(0.86)
`(0.86)
`0.00
`(0.81)
`1.46
`84.08
`
`06/13
`195
`15
`211
`11
`0
`2
`224
`20
`0
`20
`0
`80
`0
`100
`123
`0
`224
`
`06/14E % ch
`63
`76.5
`-
`-
`(46)
`32.0
`(5)
`2.0
`(51)
`29.8
`0
`-
`0
`0.0
`0
`0.0
`0
`-
`(51)
`29.9
`0
`-
`(51)
`29.9
`0
`-
`0
`-
`0
`-
`(51)
`29.9
`(51)
`29.9
`0.0
`-
`
`06/14E % ch
`(0.59)
`31.4
`(0.59)
`31.4
`(0.59)
`31.4
`0.00
`-
`(0.54)
`33.6
`1.02
`-30.1
`85.91
`2.2
`
`06/14E % ch
`151
`-22.8
`25
`64.1
`176
`-16.4
`20.4
`13
`0
`-
`2
`0.0
`192
`-14.5
`15.4
`23
`0
`-
`23
`15.4
`0
`-
`0.0
`80
`-
`0
`104
`3.1
`88
`-28.8
`0
`-
`192
`-14.5
`
`06/15E % ch
`71
`13.0
`-
`-
`(54)
`-16.6
`(5)
`2.0
`(59)
`-15.2
`0
`-
`0
`0.0
`0
`0.0
`0
`-
`(59)
`-15.3
`0
`-
`(59)
`-15.3
`0
`-
`0
`-
`0
`-
`(59)
`-15.3
`(59)
`-15.3
`0.0
`-
`
`06/15E % ch
`(0.68)
`-14.0
`(0.68)
`-14.0
`(0.68)
`-14.0
`0.00
`-
`(0.62)
`-15.3
`0.53
`-48.5
`86.91
`1.2
`
`06/15E % ch
`109
`-27.7
`19
`-23.5
`128
`-27.1
`24.3
`16
`0
`-
`2
`0.0
`147
`-23.3
`-10.9
`21
`0
`-
`21
`-10.9
`0
`-
`0.0
`80
`-
`0
`101
`-2.5
`46
`-47.9
`0
`-
`147
`-23.3
`
`06/16E
`127
`-
`(15)
`(5)
`(20)
`0
`0
`0
`0
`(19)
`0
`(19)
`0
`0
`0
`(19)
`(19)
`0.0
`
`06/16E
`(0.22)
`(0.22)
`(0.22)
`0.00
`(0.16)
`1.87
`87.91
`
`06/16E
`224
`20
`244
`20
`0
`2
`267
`22
`0
`22
`0
`80
`0
`103
`164
`0
`267
`
`06/17E
`177
`176
`20
`(5)
`15
`0
`0
`0
`0
`15
`0
`15
`0
`0
`0
`15
`15
`0.0
`
`06/17E
`0.15
`0.15
`0.17
`0.00
`0.20
`3.36
`98.77
`
`06/17E
`354
`21
`375
`26
`0
`2
`403
`24
`0
`24
`0
`80
`0
`104
`299
`0
`403
`
`06/18E
`215
`214
`44
`(5)
`39
`0
`0
`0
`0
`39
`0
`39
`0
`0
`0
`39
`39
`0.0
`
`06/18E
`0.40
`0.40
`0.44
`0.00
`0.45
`4.00
`99.77
`
`06/18E
`408
`22
`430
`32
`0
`2
`465
`25
`0
`25
`0
`80
`0
`105
`360
`0
`465
`
`06/18E
`06/17E
`06/16E
`06/15E % ch
`06/14E % ch
`06/13
`06/12
`06/11
`Cash flow (US$m)
`39
`15
`(19)
`(59)
`(51)
`(73)
`(73)
`(58)
`Net income (before pref divs)
`-15.3
`29.9
`5
`5
`5
`5
`5
`5
`5
`5
`Depreciation & amortisation
`2.0
`2.0
`-
`-12.0
`1
`1
`1
`3
`(7)
`(6)
`25
`41
`Net change in working capital
`18
`17
`15
`14
`12
`11
`9
`4
`Other operating
`10.0
`10.0
`Operating cash flow
`63
`(8)
`37
`1
`(37)
`(40)
`(63)
`(34)
`9.1
`35.5
`(12)
`(11)
`(9)
`(8)
`(7)
`(4)
`(3)
`(2)
`Tangible capital expenditure
`-15.0
`-84.2
`-
`-
`0
`0
`0
`0
`0
`0
`0
`0
`Intangible capital expenditure
`0
`0
`0
`0
`0
`0
`0
`0
`Net (acquisitions) / disposals
`-
`-
`0
`0
`0
`0
`0
`0
`0
`1
`Other investing
`-
`-
`Investing cash flow
`(12)
`(1)
`(11)
`(9)
`(8)
`(7)
`(4)
`(3)
`-15.0
`-84.2
`-
`-
`0
`0
`0
`0
`0
`0
`0
`0
`Equity dividends paid
`0.0
`-97.0
`3
`103
`123
`3
`3
`101
`7
`91
`Share issues / (buybacks)
`0
`0
`0
`0
`0
`0
`0
`0
`Other financing
`-
`-
`0
`0
`0
`0
`0
`0
`0
`0
`Change in debt & pref shares
`-
`-
`Financing cash flow
`3
`103
`123
`3
`3
`101
`7
`91
`0.0
`-97.0
`Cash flow inc/(dec) in cash
`55
`130
`115
`(42)
`(44)
`34
`(30)
`82
`5.9
`-
`0
`0
`0
`0
`0
`0
`0
`(1)
`FX / non cash items
`-
`-
`Balance sheet inc/(dec) in cash
`55
`130
`115
`(42)
`(44)
`34
`(30)
`81
`5.9
`-
`Source: Company accounts, UBS estimates. (UBS) metrics use reported figures which have been adjusted by UBS analysts.1Cash EPS (UBS, diluted) is calculated using UBS net income adding back depreciation and
`amortization.
`
`
`
`
`Immunogen Inc 11 June 2014
`
` 21
`
`IMMUNOGEn 2271, pg. 5
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`
`
`Immunogen Inc (IMGN.O)
`
`Valuation (x)
`P/E (local GAAP, diluted)
`P/E (UBS, diluted)
`P/CEPS
`Equity FCF (UBS) yield %
`Net dividend yield (%)
`P/BV x
`EV/revenues (core)
`EV/EBITDA (core)
`EV/EBIT (core)
`EV/OpFCF (core)
`EV/op. invested capital
`
`
`
`Enterprise value (US$m)
`Market cap.
`Net debt (cash)
`Buy out of minorities
`Pension provisions/other
`Total enterprise value
`Non core assets
`Core enterprise value
`
`
`
`Growth (%)
`Revenue
`EBITDA (UBS)
`EBIT (UBS)
`EPS (UBS, diluted)
`Net DPS
`
`
`
`Margins & Profitability (%)
`Gross profit margin
`EBITDA margin
`EBIT margin
`Net earnings (UBS) margin
`ROIC (EBIT)
`ROIC post tax
`ROE (UBS)
`
`
`
`Capital structure & Coverage (x)
`Net debt / EBITDA
`Net debt / total equity %
`Net debt / (net debt + total equity) %
`Net debt/EV
`Capex / depreciation %
`Capex / revenue %
`EBIT / net interest
`Dividend cover (UBS)
`Div. payout ratio (UBS) %
`
`
`
`Revenues by division (US$m)
`Others
`Total
`
`
`
`06/11
`NM
`(10.8)
`NM
`(1.6)
`0.0
`4.9
`NM
`-8.7
`NM
`NM
`NM
`
`06/11
`634
`(151)
`0
`0
`483
`0
`483
`
`06/11
`38.5
`-19.1
`-17.5
`1.3
`-
`
`06/11
`-
`NM
`-311.8
`NM
`202.4
`NM
`(48.2)
`
`06/11
`3.5
`(136.6)
`NM
`(39.6)
`41.1
`10.5
`NM
`-
`-
`
`06/11
`19
`19
`
`06/12
`NM
`(13.4)
`NM
`(3.8)
`0.0
`11.8
`NM
`-11.7
`NM
`NM
`NM
`
`06/12
`980
`(176)
`0
`0
`804
`0
`804
`
`06/12
`-15.3
`-24.2
`-21.7
`-11.7
`-
`
`06/12
`-
`NM
`-447.9
`NM
`114.2
`NM
`(65.5)
`
`06/12
`2.3
`(191.8)
`NM
`(20.0)
`62.8
`17.8
`NM
`-
`-
`
`06/12
`16
`16
`
`06/13
`NM
`(17.1)
`NM
`(5.4)
`0.0
`10.1
`NM
`-15.5
`NM
`NM
`NM
`
`06/13
`1,235
`(178)
`0
`0
`1,056
`0
`1,056
`
`06/13
`117.2
`0.5
`0.3
`9.4
`-
`
`06/13
`-
`NM
`-205.5
`NM
`98.0
`NM
`(70.1)
`
`06/13
`2.9
`(158.3)
`NM
`(18.5)
`80.4
`10.7
`NM
`-
`-
`
`06/13
`36
`36
`
`06/14E
`NM
`(20.7)
`NM
`(4.5)
`0.0
`12.0
`NM
`-18.8
`NM
`NM
`NM
`
`06/14E
`1,045
`(173)
`0
`0
`872
`0
`872
`
`06/14E
`76.5
`32.0
`29.8
`31.4
`-
`
`06/14E
`-
`NM
`-81.7
`NM
`76.0
`NM
`(48.2)
`
`06/14E
`3.2
`(171.6)
`NM
`(17.3)
`145.2
`11.2
`NM
`-
`-
`
`06/14E
`63
`63
`
`06/13
`06/12
`06/11
`EBIT (UBS) by division (US$m)
`(73)
`(73)
`(60)
`Others
`(73)
`(73)
`(60)
`Total
`Source: Company accounts, UBS estimates. (UBS) metrics use reported figures which have been adjusted by UBS analysts.
`
`06/14E
`(51)
`(51)
`
`06/15E
`NM
`(18.2)
`NM
`(4.3)
`0.0
`23.3
`NM
`-16.9
`NM
`NM
`NM
`
`06/15E
`1,045
`(130)
`0
`0
`915
`0
`915
`
`06/15E
`13.0
`-16.6
`-15.2
`-14.0
`-
`
`06/15E
`-
`NM
`-83.3
`NM
`93.6
`NM
`(87.9)
`
`06/15E
`2.0
`(238.0)
`NM
`(11.9)
`163.7
`11.4
`NM
`-
`-
`
`06/15E
`71
`71
`
`06/15E
`(59)
`(59)
`
`06/16E
`NM
`(55.5)
`NM
`(0.8)
`0.0
`6.6
`6.9
`-59.5
`NM
`NM
`NM
`
`06/16E
`1,045
`(167)
`0
`0
`878
`0
`878
`
`06/16E
`78.5
`72.7
`66.5
`67.2
`-
`
`06/16E
`-
`NM
`-15.6
`NM
`32.2
`32.2
`(18.5)
`
`06/16E
`15.2
`(136.3)
`NM
`(25.5)
`184.6
`7.3
`NM
`-
`-
`
`06/16E
`127
`127
`
`06/16E
`(20)
`(20)
`
`06/17E
`NM
`80.9
`54.3
`2.5
`0.0
`3.7
`4.3
`38.2
`NM
`NM
`NM
`
`06/17E
`1,045
`(289)
`0
`0
`756
`0
`756
`
`06/17E
`39.5
`-
`-
`-
`-
`
`06/17E
`NM
`11.2
`8.3
`8.5
`(25.7)
`NM
`6.5
`
`06/17E
`(17.9)
`(118.3)
`NM
`(46.8)
`NM
`6.0
`NM
`-
`-
`
`06/17E
`177
`177
`
`06/17E
`15
`15
`
`06/18E
`31.0
`31.0
`24.7
`5.0
`0.0
`3.1
`3.5
`17.0
`19.3
`23.1
`NM
`
`06/18E
`1,045
`(289)
`0
`0
`756
`0
`756
`
`06/18E
`21.7
`124.1
`166.6
`160.6
`-
`
`06/18E
`NM
`20.7
`18.2
`18.4
`(75.5)
`NM
`12.0
`
`06/18E
`(9.2)
`(113.6)
`NM
`(54.0)
`NM
`5.5
`NM
`-
`-
`
`06/18E
`215
`215
`
`06/18E
`39
`39
`
`
`
`Immunogen Inc 11 June 2014
`
` 22
`
`IMMUNOGEn 2271, pg. 6
`Phigenix v. Immunogen
`IPR2014-00676
`
`

`

`
`
`
`
`Forecast returns
`
`Forecast price appreciation
`
`Forecast dividend yield
`
`Forecast stock return
`
`Market return assumption
`
`Forecast excess return
`
`
`
`
`
`Statement of Risk
`
`+5.8%
`
`0.0%
`
`+5.8%
`
`5.4%
`
`+0.4%
`
`Key risks associated with a commercial and development-stage biotechnology
`company include: (a) the ability to finance the company through debt and equity
`issuances; (b) the outcome of clinical trials and regulatory approvals; and (c) the
`ability of management to bring its development projects to market.
`
` Immunogen Inc 11 June 2014
`
` 23
`
`IMMUNOGEn 2271, pg. 7
`Phigenix v. Immunogen
`IPR2014-00676
`
`