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Biotech Firm's Shares Double on $6B Deal
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Shares of IGM Biosciences Inc. traded 97% higher after the company reported FY/21 financial results and announced it entered into a collaborative partnership with Sanofi SA to develop six separate IgM antibody agonists for three oncology and three autoimmune/inflammation targets.

Clinical-stage biotech firm IGM Biosciences Inc. (IGMS:NASDAQ), which utilizes its proprietary IgM antibody technology platform to discover, develop, and commercialize new IgM antibody agonists, today provided an update regarding recent developments at the company and announced Q4/21 and FY/21 financial results for the period ended December 31, 2021.

The company's CEO Fred Schwarzer commented, "IGM continues to make progress in creating a new class of antibody medicines, which strengthens our commitment to use our expertise to develop and improve upon the inherent qualities of IgM antibodies…Notably, our exclusive collaboration agreement with Sanofi, announced today, will accelerate the development of our IgM antibody platform across multiple areas of high unmet need beyond our current pipeline efforts."

"Our pipeline continues to progress with considerable speed. Namely, the initiation of two Phase 2 studies for our T cell bispecific antibody IGM-2323 and the continued progress in our DR5 agonist IGM-8444 Phase 1 combination treatment regimens. We look forward to sharing information on these efforts later this year," CEO Schwarzer added.

The company stated in a separate news release today that it has entered into an exclusive worldwide collaboration agreement with Sanofi SA (SNY:NYSE) to address six different targets of which three are aimed at oncology and three will focus on autoimmune and inflammation targets. The firm indicated the two companies plan to use IGM's proprietary IgM antibody technology platform to discover the IgM antibody agonists.

Under the terms of the agreement, Sanofi will pay IGM an upfront payment of $150 million upfront for the initial stages of development. IMG noted that the total amount it receives could potentially exceed $6 billion over the life of the agreement if all development, regulatory and commercial milestones are achieved. For oncology, the agreement calls for a 50-50 share in the profits from commercial sales in certain major market countries along with tiered royalties in non-major markets. IGM will also receive tiered royalties for autoimmune/inflammation targets worldwide.

In addition, the company advised that Sanofi has shown interest in making up to a $100 million investment in non-voting IGM shares via a public financing.

The company explained in greater detail that for each of the three oncology targeted programs, IGM will take the lead on conducting R&D activities and will assume all costs, through biologics license application(s) (BLA) submitted to the U.S. Food and Drug Administration (FDA) or the European Medicines Agency (EMA). For each BLA granted, IMG will receive a milestone payment of up to $940 million.

The terms for the immunology/inflammation target program stipulate that IGM will oversee R&D and assume the costs of the first two constructs of Phase 1 clinical trials. After that, Sanofi will assume responsibilities for future development costs and will pay IMG milestone payments of up to $1,065 million.

Sanofi's Global Head of Research and Development John Reed, M.D., Ph.D. remarked, "We look forward to this collaboration with IGM Biosciences, a pioneer in a new class of antibody medicines for the treatment of cancer, immunology, and inflammatory diseases. The IGM Biosciences technology platform offers an exciting approach to developing high-avidity IgM antibodies that can efficiently bind and stimulate the activity of cell surface receptors. This unique platform has the potential to overcome historical limitations of conventional IgG antibodies when seeking agonists of some classes of receptors."

IGM CEO Schwarzer added, "Sanofi is a global leader in the development and commercialization of innovative therapies, and we welcome the addition of their extensive expertise and resources in expanding and accelerating the development of our IgM antibody platform across multiple areas of high unmet need."

The firm also provided an update on the status of its current clinical trials. The company stated that Phase 2 studies of its IGM-2323 have initiated in two dosage levels in patients diagnosed with diffuse large B cell lymphoma (DLBCL) and follicular lymphoma (FL).

The company stated that its IGM-8444, which is an IgM DR5 agonist, is being advanced in a Phase I study in subjects with relapsed and/or refractory solid and hematologic cancers. The firm expects to report the initial data from the dose escalation portion of the trial in 2022.

The company indicated that during 2022, it expects to file two new Investigational New Drug Applications (IND). The first IND is for its IGM-7354, which it described as "an IL-15 x PD-L1 bispecific IgM antibody for solid tumors," and the second IND known as IGM-2644, which IGM said is "a CD38 x CD3 bispecific IgM antibody for multiple myeloma."

The company reported that as of December 31, 2021, it held $229.5 million in cash and investments on its balance sheet, versus $366.3 million held on December 31, 2020.

The firm indicated that for FY/21 it spent a total of $127.0 million on Research and Development (R&D), compared to $65.0 million in FY/20.

The company stated that for FY/21, it recorded a net loss of $165.2 million, or $4.93 per share, compared to a net loss of $81.4 million, or $2.65 per share in FY/20.

IGM offered some forward guidance and advised that of FY/22 it expects fully inclusive GAAP operating expenses of $250-260 million. The firm added that when it reports it Q1/22 financial results in May it intends to provide more information regarding expected FY/22 collaboration and license revenue and cash position guidance.

Sanofi is a global healthcare firm based in Paris, France. The company has a market cap of about $130 billion and has operations in over 100 countries. The firm's three primary business segments are pharmaceuticals, consumer healthcare and vaccines.

IGM Biosciences is a clinical-stage biotechnology company based in Mountain View, Calif. The firm uses its proprietary IgM technology platform to create and develop IgM antibodies for therapeutic treatments for cancer, infectious diseases, and autoimmune and inflammatory diseases.

IGM Biosciences started off the days with a market cap of around $486.6 million with approximately 32.46 million shares outstanding and a short interest of about 14.0%. IGMS shares opened 42% higher today at $21.32 (+$6.33, +42.23%) over yesterday's $14.99 closing price. The stock has traded today between $19.98 and $35.98 per share and closed for trading at $29.49 (+$14.50, +96.73).



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