Micromet Raises Funds - Analyst Blog

Recently, Micromet (MITI) announced a 10 million share offering of common stock. In Aug 2009, Micromet received net proceeds of about $75 million from a common stock issuance.

We believe with the advancement of clinical trials, the company’s R&D costs are expected to increase further, hence the need to raise funds. Due to the funds raised during the third quarter, Micromet exited 2009 with $113.4 million in cash and cash equivalents, up from $46 million at the end of Dec 2008.

Micromet does not have any marketed products at present and records revenues in the form of licensing fees, milestone payments and fees for research services earned from license agreements or from research and development collaboration agreements. Blinatumomab, the main pipeline candidate at Micromet is being studied for indications such as acute lymphoblastic leukemia (ALL) and non-Hodgkin’s lymphoma (NHL).

During the fourth quarter of 2009, Micromet presented encouraging data from a phase II trial of blinatumomab in patients with ALL. It was observed that about 80% of the patients achieved primary endpoint of the trial within the first treatment cycle.

Following encouraging results, the company plans to begin a pivotal trial with blinatumomab in 2010. The pivotal trial will require additional funds prompting Micromet to tap the market.

We are encouraged to see the development of the product portfolio at Micromet. However, we remain concerned since the pipeline is yet to deliver. The company is heavily dependent on blinatumomab – any hiccup in any of its clinical development programs will weigh heavily on the stock. We have an “Underperform" recommendation on the stock.
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