ImmunoGen Inc. made public Monday deflating news that partner GlaxoSmithKline plc does not wish to advance their shared product under the agreement in place now, and also said that partner Genentech Inc. plans to conduct additional preclinical work on a separate but similar tumor-activated prodrug in order to obtain a better profile.

Those combined announcements drove ImmunoGen's stock (NASDAQ:IMGN) down $1.83 Monday, or 46 percent, to close at $2.15.

Mitchel Sayare, ImmunoGen's chairman and CEO, said GlaxoSmithKline, of London, and Cambridge, Mass.-based ImmunoGen will draw up chairs to focus on renegotiating the deal, but there is no assurance they will find common ground.

"In a phone call Thursday, [GSK] told us they elected not to advance [cantuzumab mertansine] into Phase II under the present terms," Sayare said during a conference call. "We plan to renegotiate the agreement. We expect [negotiations] will extend over the next several months.

"If we can't [reach a mutually agreeable conclusion], or negotiations yield results not in the best interest of ImmunoGen, we will reacquire the product," he said, adding that if that happens, ImmunoGen would move ahead alone.

Stephens Inc. analyst Jason Zhang said, in his opinion, the deal is over.

"I have not seen any pharmaceutical company make an announcement saying it doesn't want to develop a product and then say, OK, we'll negotiate new terms,'" he told BioWorld Today. "I'm pretty sure [GSK] will stop development."

ImmunoGen signed on with GSK (still SmithKline Beecham plc then) in February 1999 in a deal that was valued at up to $45 million at the time - $41.5 million of that being in up-front fees and milestone payments. Sayare said ImmunoGen has received $11.5 million in milestones since then, and GSK made a $2.5 million equity investment in ImmunoGen. What happens financially from here on out is "subject to negotiation," he said. (See BioWorld Today, Feb. 3, 1999.)

It was simply coincidental, the company said, that Genentech, of South San Francisco, informed ImmunoGen of the additional preclinical work on trastuzumab-DM1 at about the same time as the GSK phone call. That deal was signed in May 2000. The new studies will slide back the filing of an investigational new drug application for the product. Although Sayare called the Genentech move "the right decision for the right reasons," the one-two punch hurt ImmunoGen, Zhang said.

"It's pretty bad, as you can see from the stock," he said. "The GSK deal is kind of a barometer for the technology."

It's a technology that has "a lot of unanswered questions," Zhang added, although he said in theory the technology is "still a great idea." In the case of GSK, cantuzumab mertansine is a tumor-activated prodrug (TAP) compound created by conjugating the cytotoxic agent DM1 with the humanized monoclonal antibody C242. Through the antibody, the compound targets the CanAg receptor found on the surface of some cancer cells, including colorectal, pancreatic, gastric and non-small-cell lung cancers.

But GSK's decision casts doubt over the entire platform, Zhang said.

"We just don't know about [the technology] yet," Zhang said. "The scientists and the companies don't know what happens when they put this into humans. It's like what gene therapy was a couple of years ago."

It isn't just GSK and Genentech using ImmunoGen's TAP technology with their own antibodies - Millennium Pharmaceuticals Inc., of Cambridge, Mass., and Boehringer Ingelheim GmbH, of Ingelheim, Germany, have ImmunoGen TAP compounds in development. And Abgenix Inc., of Fremont, Calif., has a deal with ImmunoGen, using Abgenix's XenoMouse antibodies. (See BioWorld Today, Sept. 7, 2000, and March 7, 2001.)

When asked in the conference call if industry watchers might now be questioning the platform itself, Sayare said all of ImmunoGen's partners "continue to be very excited in this technology."

"We've sensed no slowdowns in our other partnerships," he said.

Trading at more than $16 a share at the beginning of the year, ImmunoGen has felt the effects of a sagging biotechnology sector. With its share price slung so low Monday, Zhang said ImmunoGen might be a takeover possibility.

"It's stock is trading at less than cash, so you could say [the price drop] is an overreaction," Zhang said. "I think ImmunoGen would be a good takeover target, just for the cash and the drug discovery technology they have."

With a reported cash position of about $144 million as of March 31, ImmunoGen has solid financial footing. The key now for both cantuzumab mertansine and the platform, Zhang said, is to convince those watching "that there is something there."

Regardless of how negotiations turn out, Sayare was firm in his resolution to get the product moving, and to move it into a "specific patient population," as opposed to the broad Phase I work completed.

"Our intent and expectation is to put the product into Phase II as quickly as we can," he said, and that is true for a partnered product or one ImmunoGen holds alone.

Throughout the conference call, Sayare and ImmunoGen deferred questions about the nature of its partnerships and the drugs in development to its partners. At times, the competitive nature of the business requires just that, but both analysts and investors participating in the call were agitated that they couldn't know more.

"I know [ImmunoGen] doesn't want to jeopardize its partnerships," Zhang said. "But it is pretty frustrating with this company because they don't tell you what is happening, and that's not going to help. I do feel that some of the private investors are frustrated. It's not efficient communication in this market."