Nature of Business and Plan of Operations

9 Months Ended

Sep. 30, 2017

Nature of Business and Plan of Operations

Nature of Business and Plan of Operations

A.Nature of Business and Plan of Operations

ImmunoGen, Inc. (the Company) was incorporated in Massachusetts in 1981 and is focused on the development of antibody-drug conjugates, or ADCs, for the treatment of cancer. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, the development by its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, manufacturing and marketing limitations, collaboration arrangements, third‑party reimbursements and compliance with governmental regulations.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under the new standard, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. This standard was adopted by the Company at December 31, 2016. As of the date of filing our second quarter Form 10-Q on August 4, 2017, substantial doubt was deemed to exist under this standard regarding the Company’s ability to continue as a going concern due to our cash position at that time. In August 2017, the Company entered into a collaboration and option agreement with Jazz Pharmaceuticals Ireland Limited (Jazz). As part of the agreement, Jazz made an upfront payment of $75 million to the Company. Additionally, Jazz will pay the Company up to $100 million in development funding over seven years to support up to three ADC programs. Also, on October 11, 2017, the Company closed a public offering of 16.7 million shares of common stock, with net proceeds to the Company of $101.6 million. Based on the amount of cash and cash equivalents at September 30, 2017 and receipt of the public offering proceeds in October, the Company has sufficient resources to support its operating plans for a period in excess of twelve months from the 10-Q filing, therefore, substantial doubt is no longer deemed to exist under ASU 2014-15 regarding the Company’s ability to continue as a going concern as of the date of filing this Form 10-Q.