ImmunoGen Annual Report 2021

FY2021 Annual Report · ImmunoGen

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A N N U A L
R E P O R T 2 0 2 1

NASDAQ: IMGN

MESSAGE TO OUR SHAREHOLDERS

As we navigated the ongoing challenges of

the global environment, I am proud to say
that the team at ImmunoGen delivered

another productive year for the business in 2021.
These efforts culminated in late November with
the positive top-line data from SORAYA, our pivotal
study for mirvetuximab soravtansine (MIRV) in
ovarian cancer. Based upon the full SORAYA results,
last month we submitted a biologics license
application (BLA) for MIRV to the US Food and Drug
Administration (FDA) and are planning for our ﬁrst
commercial launch in the second half of this year.

Beyond the pending registration for MIRV, we
generated compelling data with pivekimab
sunirine (PVEK, formerly IMGN632) in both blastic
plasmacytoid dendritic cell neoplasm (BPDCN)
and acute myeloid leukemia (AML), advanced our
earlier-stage programs, and took the ﬁrst steps to
reignite our research engine. On the strength of
this progress, we completed the largest follow-
on offering in our history, with gross proceeds
of almost $300 million, giving us a cash runway
comfortably into 2024. And ﬁnally, we strengthened
our management team with the appointment of
Kristen Harrington-Smith as Chief Commercial
Ofﬁcer and Dr. Mimi Huizinga as Head of Medical
Affairs, as well as adding Dr. Helen Thackray and
Tracey L. McCain, Esq. to our Board of Directors.

With the progress over the last twelve months, we
enter 2022 with signiﬁcant momentum, a motivated
team, and exciting prospects for ImmunoGen, our
shareholders, and our patients.

POSITIONING MIRV MONOTHERAPY AS THE
STANDARD OF CARE FOR OVARIAN CANCER
PATIENTS WITH FRα-HIGH DISEASE

We are pursuing three studies designed to position
MIRV monotherapy as the standard of care for
ovarian cancer patients whose tumors express
high levels of folate receptor alpha (FRα): SORAYA,
MIRASOL, and PICCOLO.

SORAYA is a Phase 3 single-arm pivotal trial
evaluating MIRV monotherapy in patients with
FRα-high platinum-resistant ovarian cancer who
have been previously treated with Avastin®. With an
objective response rate above 30%, a duration of
response of around seven months, and a treatment-
related discontinuation rate below 10%, we were
pleased with the data from SORAYA and believe
these results will support accelerated approval in
this population.

MIRASOL is our Phase 3 conﬁrmatory study
evaluating MIRV compared to single-agent
chemotherapy in patients with FRα-high platinum-
resistant ovarian cancer. MIRASOL is designed to
support full approval in this population in the US and
our initial registration for MIRV in the EU.

PICCOLO expands the evaluation of MIRV
monotherapy into FRα-high platinum-sensitive
disease. This is a single-arm Phase 2 trial, which is
actively enrolling eligible patients.

ESTABLISHING MIRV AS THE COMBINATION
AGENT OF CHOICE IN OVARIAN CANCER

We have designed a number of company-
sponsored studies and are supporting investigator-
sponsored trials (ISTs) for MIRV plus chemotherapy
doublets as part of a comprehensive strategy

to move into broader patient populations by
establishing MIRV as the combination agent of
choice in ovarian cancer.

FORWARD II – During an oral presentation at
the 2021 ASCO Annual Meeting, we highlighted
positive, mature efﬁcacy and safety data from
the Phase 1b/2 cohort evaluating MIRV plus
bevacizumab in platinum-agnostic recurrent ovarian
cancer. We expect to gain compendia listings for
this combination in close proximity to the initial
monotherapy approval for MIRV.

GLORIOSA – We aligned with FDA on the
design of a randomized Phase 3 trial of MIRV plus
bevacizumab in the maintenance setting in FRα-
high platinum-sensitive ovarian cancer. We expect
to initiate GLORIOSA in mid-2022.

Trial 0420 – We expect to initiate a single-arm
Phase 2 study of MIRV plus carboplatin followed by
MIRV continuation in FRα-low, medium, and high
patients with platinum-sensitive ovarian cancer in
the second quarter of 2022.

ISTs - We continue to support two key ISTs evaluating
MIRV plus carboplatin; these data will further inform
our path forward as we consider additional label
expansion options for this combination.

PROGRESSING PVEK AS OUR SECOND PIVOTAL
PROGRAM

In addition to MIRV, we advanced PVEK, our
CD123-targeting ADC, in BPDCN and AML. PVEK has
demonstrated compelling safety and efﬁcacy data
as a monotherapy in BPDCN and in combination
regimens for AML, and has the potential to become
our second marketed product next year.

We previously aligned with FDA on the study
design for CADENZA, a single-arm pivotal Phase 2
study to support full approval of PVEK in frontline
BPDCN, and expect top-line data in the second half
of 2022. Additionally, in an oral session at the 2021
ASH Annual Meeting, we presented initial safety
and efﬁcacy ﬁndings from the Phase 1b/2 study of
PVEK in combination with Vidaza® and Venclexta®
in patients with relapsed/refractory AML. We are
moving forward with Phase 2 expansion cohorts
for this triplet, with enrollment ongoing in both
frontline and relapsed AML.

ADVANCING OUR EARLIER-STAGE PORTFOLIO

We presented preclinical data on IMGC936, our
ﬁrst-in-class ADAM9-targeting ADC being co-
developed with MacroGenics, at the 2021 AACR
Annual Meeting, demonstrating promising anti-
tumor activity in multiple solid tumor models. Phase
1 dose escalation is underway, with initial data
anticipated this year.

As we look to provide a potential option for patients
with a broader range of FRα-expression in ovarian and
other solid tumors, we submitted the Investigational
New Drug (IND) application for IMGN151, our next-
generation anti-FRα ADC, in the ﬁrst quarter of 2022.
We expect to initiate enrollment this year following
the submission of chemistry, manufacturing, and
controls information to FDA.

BUILDING BEST-IN-CLASS COMMERCIAL AND
MEDICAL AFFAIRS TEAMS

Last year, we initiated commercial preparations
and expanded our stakeholder education efforts

in anticipation of the launch of MIRV. In support of
this effort, we have outlined four launch imperatives
to guide our preparations ahead of potential FDA
approval of MIRV this year. These include:

• Redeﬁning expectations for positive outcomes in

platinum-resistant ovarian cancer with MIRV;

• Supporting adoption of early FRα-testing

and establishing standards for tumor sample
evaluation for both in-house and centralized
laboratories;

• Ensuring positive physician experiences

through education and guidance for patient
management; and

• Seeking broad payer access and reimbursement
and delivering a seamless patient experience.

With the addition of our Chief Commercial Ofﬁcer and
Head of Medical Affairs, we are actively building our
customer-facing teams to achieve these objectives.

PARTNERING TO MAXIMIZE OUR PIPELINE AND
TECHNOLOGY

Partnering is a core element of our strategy. As
evidenced by our more recent collaborations, we
are looking to pursue geographic partnerships, like
our agreement with Huadong Medicines to develop
and commercialize MIRV in Greater China, and
co-development relationships, such as our 50/50
partnership with MacroGenics through which we
can lever our capabilities, IP, and know-how to build
our pipeline. In addition, we have built an extensive
technology portfolio and, given the resurging
interest in ADCs, have entertained licensing deals
that would allow us to generate revenue from these
assets. To this end, we were pleased to announce
the licensing agreement with Eli Lilly for our novel
camptothecin technology, with the potential for up
to $1.7 billion in total exercise fees and milestone
payments.

OUR TRANSITION TO A FULLY INTEGRATED
ONCOLOGY COMPANY

After a productive 2021, we look forward to an
exciting year ahead with the launch of our ﬁrst
commercial product for our lead program, data
from our second pivotal program, acceleration of
our earlier-stage portfolio and the rebuilding of
our research capabilities, all supported by a strong
cash position and an experienced management
team. Taken together, these efforts will transition
ImmunoGen into a global and fully integrated
oncology company.

In closing, I thank the team at ImmunoGen, who
continue to inspire with their resiliency and
commitment to delivering more good days for
people living with cancer; our board members and
shareholders, for your continued support; and the
patients, caregivers, physicians, nurses, and our
scientiﬁc and clinical collaborators, whose efforts
allow us to realize the promise of our science.

Sincerely,

Mark J. Enyedy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the year ended December 31, 2021

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

(cid:1409)

(cid:1407)

For the period from to
Commission file number 0-17999
ImmunoGen, Inc.

Massachusetts

(State or other jurisdiction
of incorporation or organization)

04-2726691
(I.R.S. Employer
Identification No.)

830 Winter Street, Waltham, MA 02451

(Address of principal executive offices, including zip code)

(Registrant’s telephone number, including area code)

(781) 895-0600

Title of Each Class
Common Stock, $.01 par value

Securities registered pursuant to Section 12(b) of the Act:
Trading Symbol(s)
IMGN

Name of Each Exchange on Which Registered
Nasdaq Global Select Market

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. (cid:1409) Yes (cid:1407) No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. (cid:1407) Yes (cid:1409) No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. (cid:1409) Yes (cid:1407) No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). (cid:1409) Yes (cid:1407) No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting

company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer (cid:1409)
Non-accelerated filer (cid:1407)

Accelerated filer (cid:1407)
Smaller reporting company (cid:1407)
Emerging growth company (cid:1407)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying

with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. (cid:1407)

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm
that prepared or issued its audit report. (cid:1409)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). (cid:1407) Yes (cid:1409) No

Aggregate market value, based upon the closing sale price of the shares as reported by the Nasdaq Global Select Market, of common stock

held by non-affiliates at June 30, 2021: $1,314,157,331 (excludes shares held by executive officers and directors). Exclusion of shares held by any
person should not be construed to indicate that such person possesses the power, direct or indirect, to direct or cause the direction of management or
policies of the registrant, or that such person is controlled by or under common control with the registrant. Common stock outstanding at
February 16, 2022: 220,530,899 shares.

Portions of the definitive Proxy Statement on Schedule 14A to be delivered to shareholders in connection with the Annual Meeting of

Shareholders to be held on June 15, 2022 are incorporated by reference into Part III of this report.

DOCUMENTS INCORPORATED BY REFERENCE

ImmunoGen, Inc.

Form 10-K

TABLE OF CONTENTS

Part I

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II

Item

1.
1A.
1B.
2.
3.
4.

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of

6.
7.
7A.
8.
9.
9A.
9B.
9C.

10.
11.
12.

13.
14.

15.
16.

Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . .
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . .
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III

Directors, Executive Officers, and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder

Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . . . . . . . . .
Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part IV

Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Forward-looking statements

The Annual Report on Form 10-K includes forward-looking statements. Forward-looking statements are neither

historical facts nor assurances of future performance. Instead, these forward-looking statements relate to analyses and
other information that are based on beliefs, expectations, assumptions, and forecasts of future results and estimates of
amounts that are not yet determinable. These statements also relate to our prospects, future developments, product
candidates, and business strategies.

These forward-looking statements are identified by their use of terms and phrases, such as “anticipate,”

“believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” and other similar terms
and phrases, including references to assumptions.

The forward-looking statements in this Annual Report on Form 10-K include, but are not limited to, statements

about:
•

•

the initiation, cost, timing, progress and results of our current and future research and development activities,
preclinical studies, and clinical trials;

the timing of, and our ability to obtain, regulatory approvals for our product candidates, including
mirvetuximab soravtansine;

the timing of our release of future data;

the potential benefits of our product candidates;

• our ability to advance any product candidates into, and successfully complete, clinical trials;
•
•
•
• our expected sources of future revenues, including from our licensing arrangements;
• our estimates regarding expenses, capital requirements, the sufficiency of our current and expected cash

the potential benefits of our licensing arrangements;

resources, and our need for additional financing;

•

the effect of the novel coronavirus (COVID-19) pandemic on the economy generally and on our business and
operations specifically, including our research and development efforts, our clinical trials and our employees,
and the potential disruptions in supply chains and to our third-party manufacturers, including the availability of
materials and equipment; and

• our commercialization, marketing, and manufacturing capabilities and strategy.

We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements,

and investors should not place undue reliance on our forward-looking statements. Additionally, these forward-looking
statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be
materially different from those contemplated by our forward-looking statements. These known and unknown risks,
uncertainties, and other factors are described in detail in the “Risk Factors” section and in other sections of this report.

The forward-looking statements contained herein represent our views as of the date of this Annual Report on

Form 10-K. Except as required by law, we disclaim any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise.

Risk Factors Summary

Our business is subject to varying degrees of risk and uncertainty. Investors should consider the risks and

uncertainties summarized below, as well as the risks and uncertainties discussed further in Part I, Item 1A, “Risk
Factors” of this Annual Report on Form 10-K.

Our business is subject to the following principal risks and uncertainties:

• We have a history of operating losses, expect to incur significant additional operating losses, and may never be

profitable.

• A pandemic, epidemic, or outbreak of an infectious disease, such as the COVID-19 pandemic, may materially

and adversely affect our business and our financial results.

•

If our Antibody-Drug Conjugate technology does not produce safe, effective, and commercially viable products
or if such products fail to obtain or maintain FDA approval, our business will be severely harmed.

• Clinical trials for our product candidates and those of our collaborators will be lengthy and expensive, and their

outcome is uncertain.

•

Interim, top-line, or preliminary data from our clinical trials that we announce may change as more patient data
become available and are subject to audit and verification procedures that could result in material changes in the
final data.

• We currently do not have the direct sales, marketing, or distribution capabilities necessary to successfully

commercialize our products on a large scale and may be unable to establish such capabilities.

•

If we are unable to protect our intellectual property rights adequately, the value of our technology and our
product candidates could be diminished.

• We expect to file for approval for mirvetuximab soravtansine from the FDA through the use of accelerated

approval pathways. If unable to obtain approval under an accelerated pathway, we may be required to conduct
additional preclinical studies or clinical trials beyond those that we currently contemplate, which could increase
the expense of obtaining, and delay the receipt of, necessary marketing approvals. Even if we receive
accelerated approval from the FDA, if our confirmatory trials do not verify clinical benefit, or if we do not
comply with rigorous post-marketing requirements, the FDA may seek to withdraw accelerated approval.
• Side effects, serious adverse events, or other undesirable properties could arise from the use of mirvetuximab
soravtansine or our other clinical product candidates and, in turn, could delay or halt clinical trials, delay or
prevent its regulatory approval, limit the commercial profile of its labeling, if approved, or result in significant
negative consequences following any marketing approval.

• We have received orphan drug designation for mirvetuximab soravtansine and other product candidates for

specified indications; we may seek additional orphan drug designation for additional indications and for our other
drug candidates. However, we may be unsuccessful in obtaining or may be unable to maintain the benefits
associated with orphan drug designation, including the potential for market exclusivity.

• As our business grows, we will become increasingly subject to additional healthcare regulation and enforcement
by various government entities, and our failure to strictly adhere to these regulatory regimes could have a
detrimental impact on our business.

• We depend on our key personnel, and we must continue to attract and retain key employees and consultants.
• Our stock price may be volatile and fluctuate significantly and results announced by us and our collaborators or

competitors could cause our stock price to decline.

Note Regarding Third-Party Trademarks

KADCYLA® is a registered trademark of Genentech, Inc. KYMRIAH® is a registered trademark of Novartis AG.
Probody is a trademark of CytomX. ELZONRIS® is a registered trademark of Menarini Group. Any other trademarks
referred to in this Annual Report on Form 10-K are the property of their respective owners.

Item 1. Business

PART I

We are a clinical-stage biotechnology company focused on developing the next generation of antibody-drug
conjugates (ADCs) to improve outcomes for cancer patients. By generating targeted therapies with enhanced anti-tumor
activity and favorable tolerability profiles, we aim to disrupt the progression of cancer and offer patients more good days.
We call this our commitment to “target a better now.”

An ADC with our proprietary technology comprises an antibody that binds to a target found on tumor cells

and is conjugated to one of our potent anti-cancer agents as a “payload” to kill the tumor cell once the ADC has bound
to its target. ADCs are an expanding class of anti-cancer therapeutics, with twelve approved products and the number of
agents in development growing significantly in recent years.

We have established a leadership position in ADCs with a portfolio of differentiated product candidates

addressing both solid tumors and hematologic malignancies.

Mirvetuximab Soravtansine

Our lead program is mirvetuximab soravtansine (mirvetuximab), a first-in-class investigational ADC targeting

folate receptor alpha (FR(cid:302)), a cell-surface protein over-expressed in a number of epithelial tumors, including ovarian,
endometrial, and non-small-cell lung cancers. Following consultation with the U.S. Food and Drug Administration
(FDA), we initiated two trials of mirvetuximab in patients with platinum-resistant ovarian cancer whose tumors express
high levels of FR(cid:302) (FR(cid:302)-high): SORAYA, a single-arm clinical trial that could lead to accelerated approval, pending
FDA review; and MIRASOL, a randomized Phase 3 clinical trial that, if successful, could lead to full approval in this
setting.

SORAYA was designed to study mirvetuximab in patients with FR(cid:302)-high platinum-resistant epithelial

ovarian, primary peritoneal, or fallopian tube cancer and who have been treated with up to three prior regimens—at
least one of which included bevacizumab. The primary endpoint for the study was confirmed objective response rate
(ORR) as assessed by investigator, including complete and partial responses, and the key secondary endpoint was
duration of response (DOR). ORR was also assessed by blinded independent central review (BICR). The study was
designed to assess ORR as compared to a null hypothesis of a 12% ORR, based on expectations with available single
agent chemotherapy from the AURELIA study in patients with platinum-resistant ovarian cancer and one to two prior
lines of therapy.

SORAYA enrolled 106 patients with a median of three prior lines of therapy (range one to four; 51% had three
prior lines of therapy and 48% had one to two prior lines of therapy). All patients received prior bevacizumab; 48% of
patients received a prior poly ADP-ribose polymerase (PARP) inhibitor. As of the November 16, 2021 cutoff date, the
median follow-up time was 8.1 months.

ORR by investigator was 32.4% (95% confidence interval (CI): 23.6%, 42.2%), including five complete

responses (CRs). ORR by BICR was 31.6% (95% CI: 22.4%, 41.9%), including five CRs. Responses were observed
regardless of prior PARP inhibitor or number of prior lines of therapy.

As of the November 16, 2021 cutoff date, median DOR was 5.9 months (95% CI: 5.6, 7.7). With nearly
half of responders continuing on therapy, the duration of response continues to evolve, and, with longer follow-up,
median DOR could increase.

Mirvetuximab was observed to be well-tolerated, consistent with safety data seen in more than 700 patients

treated in the broader mirvetuximab program. Treatment-related adverse events (AEs) led to dose reductions in 19% of
patients, dose delays in 32% of patients, and discontinuations in 7% of patients.

The most common treatment-related AEs included blurred vision (41% all grades; 6% grade 3+), keratopathy

(35% all grades; 9% grade 3+), and nausea (29% all grades; 0% grade 3+).

We plan to submit a biologics license application (BLA) to the FDA in the first quarter of 2022 for

accelerated approval of mirvetuximab in second through fourth-line patients with FR(cid:302)-positive, platinum-resistant
ovarian cancer. Thereafter, we plan to seek full approval pending a positive MIRASOL Phase 3 trial.

Beyond FR(cid:302)-high, platinum-resistant ovarian cancer in patients who had one or more prior lines of therapy,
our strategy is to move mirvetuximab into platinum-sensitive disease through supplemental approval and become the
combination agent of choice in ovarian cancer. To this end, we initiated PICCOLO, a single-arm study of mirvetuximab
monotherapy in later-line platinum-sensitive patients. We have also generated encouraging data in recurrent platinum-
sensitive disease with the combination of mirvetuximab plus carboplatin and are supporting investigator-sponsored
trials (ISTs) with this combination in a single-arm study in the neoadjuvant setting and in a randomized study comparing
mirvetuximab combined with carboplatin to standard of care in patients with recurrent platinum-sensitive disease. We
also intend to initiate a company-sponsored single-arm Phase 2 study (0420) of this combination followed by
mirvetuximab continuation in FR(cid:302)-low, medium, and high patients with platinum-sensitive disease. Results from this
study and our ongoing ISTs will inform a path to the potential registration for mirvetuximab plus carboplatin and, in
parallel, could support compendia listing for this combination.

In addition, we presented mature data from our Phase 1b FORWARD II trial of mirvetuximab plus Avastin®

(bevacizumab) in recurrent ovarian cancer in an oral presentation at the American Society for Clinical Oncology
Annual Meeting in June 2021. The combination demonstrated a 64% ORR, 11.8 month median DOR, and 10.6 month
median progression free survival. Most AEs were low grade and the most common treatment related adverse events were
gastrointestinal or ocular issues. We believe these data could support compendia listing for this combination in close

proximity to the initial monotherapy approval of mirvetuximab. Furthermore, we recently aligned with FDA on
GLORIOSA, a potential randomized Phase 3 study of mirvetuximab plus bevacizumab maintenance in FR(cid:302)-high
recurrent platinum-sensitive disease. We expect to initiate this potential label-enabling study in the second quarter of
2022.

Pivekimab Sunirine

Pivekimab sunirine (pivekimab, formerly known as IMGN632) is an ADC comprised of a high-affinity
antibody designed to target CD123 with site-specific conjugation to a DNA-alkylating payload of the novel IGN
(indolinobenzodiazepine pseudodimer) class. Our IGNs are designed to alkylate DNA without cross-linking, which has
provided a broad therapeutic index in preclinical models. We are advancing pivekimab in clinical trials for patients with
blastic plasmacytoid dendritic cell neoplasm (BPDCN) and acute myeloid leukemia (AML).

BPDCN is a rare form of blood cancer, with an annual incidence of between 500 and 1,000 patients in the US.

In October 2020, the FDA granted Breakthrough Therapy designation for pivekimab for the treatment of patients with
relapsed or refractory BPDCN. Based on feedback from the FDA, we amended our ongoing 801 Phase 2 study, known
as CADENZA, to include a new cohort of up to 20 frontline BPDCN patients. We expect to generate top-line data for
this frontline cohort in the second half of 2022. At the 2021 American Society of Hematology (ASH) Annual Meeting
in December 2021, we presented a poster highlighting three frontline patients who were enrolled in Study 801 prior to
opening of the pivotal frontline cohort; all three of these patients achieved clinical complete response (CRc) as of the
data cutoff date.

Our 802 study, which is a Phase 1b/2 study designed to determine the safety, tolerability, and preliminary
antileukemia activity of pivekimab when administered in combination with azacytidine (AZA) and venetoclax (VEN)
to patients with relapsed and frontline CD123-positive AML, is in dose-escalation, enrolling relapsed and refractory (R/R)
patients to determine the recommended Phase 2 dose of pivekimab for the triplet combination regimen. At ASH 2021, we
shared data in an oral presentation showing responses across all cohorts/doses and schedules (efficacy evaluable
population, n=46). As of the cutoff date, the ORR was 48%, with a composite complete remission (CCR) rate of 30%.
Higher intensity cohorts (n=29) were associated with higher response rates, including an ORR of 59% and a CCR rate of
38%. Significant activity was also observed in the FLT3 mutant subset (n=9), with ORR and CCR rates of 89% and
78%, respectively. The toxicity profile was manageable in this R/R AML population with multiple prior therapies. The
most common treatment emergent AEs of any grade seen in >20% of patients were infusion-related reactions, febrile
neutropenia, dyspnea, fatigue, hypophosphatemia, diarrhea, hypokalemia, nausea, vomiting, and pneumonia.
Cytopenias and infections were consistent with those observed with the AZA+VEN regimen in this R/R population. No
tumor lysis syndrome, veno-occlusive disease, capillary leak, or cytokine release were observed. The 30-day mortality
was 0%.

We are in the final stages of determining the recommended Phase 2 dose for this triplet combination and expect

to initiate expansion cohorts in relapsed and frontline patients this year.

Other Pipeline Programs

We continue to advance our earlier-stage pipeline programs. IMGC936 is an ADC in co-development with

MacroGenics, Inc. that is designed to target ADAM9, an enzyme over-expressed in a range of solid tumors and implicated
in tumor progression and metastasis. IMGC936 incorporates a number of innovations, including antibody engineering to
extend half-life, site-specific conjugation with a fixed drug-antibody ratio to enable higher dosing, and a next-generation
linker and payload designed for improved stability and bystander activity. We presented preclinical data on IMGC936 at
the American Association for Cancer Research (AACR) Annual Meeting in April 2021, demonstrating anti-tumor activity
in multiple solid tumor models. We continue to enroll patients in the Phase 1 study for this program and expect initial
data in 2022.

IMGN151 is our next generation anti-FR(cid:302) product candidate in preclinical development. This ADC integrates
innovation in each of its components, which we believe may enable IMGN151 to address patient populations with lower
levels of FR(cid:302) expression, including tumor types outside of ovarian cancer. In January 2022, we submitted an IND
application to evaluate IMGN151 in a planned Phase 1 clinical trial in patients with recurrent endometrial cancer and
recurrent, high-grade serous epithelial ovarian, primary peritoneal, or fallopian tube cancers. In February 2022, the FDA
placed a clinical hold on our IND application pending the resolution of certain chemistry, manufacturing, and controls,
or CMC, information requests. We are generating data responsive to the requests and anticipate filing these responses
mid-year, which we believe will enable us to proceed with the study in due course thereafter.

Collaborations and Out-Licenses

Over the last 40 years, we believe ImmunoGen has assembled the most comprehensive ‘‘toolbox’’ in the ADC
field. Our platform technology combines advanced chemistry and biochemistry with innovative approaches to antibody
optimization, with a focus on increasing the diversity and potency of our payload agents, advancing antibody-payload
linkage and release technologies, and integration of novel approaches to antibody engineering. These capabilities have
enabled us to generate a pipeline of novel candidates with potent anti-tumor activity and favorable safety profiles that we
can develop as monotherapies and in combination with existing and novel therapies.

Collaborating on ADC development with other companies allows us to generate revenue, mitigate expenses,

enhance our capabilities, and extend the reach of our proprietary platform. The most advanced partner program is
Roche’s marketed product, KADCYLA® (ado-trastuzumab emtansine). Our ADC technology is also used in candidates
in clinical development with a number of partners. We have evolved our partnering approach to pursue relationships
where we can gain access to technology and complementary capabilities, such as our technology swap with CytomX
Therapeutics, Inc. (CytomX), as well as co-development and co-commercialization arrangements, such as our
relationship with MacroGenics.

We have selectively licensed restricted access to our ADC platform technology to other companies to expand

the use of our technology and to provide us with cash to fund our own product programs. These agreements typically
provide the licensee with rights to use our ADC platform technology with its antibodies or related targeting vehicles to a
defined target to develop products. The licensee is generally responsible for the development, clinical testing,
manufacturing, registration, and commercialization of any resulting product candidate. As part of these agreements, we
are generally entitled to receive upfront fees, potential milestone payments, royalties on the sales of any resulting
products, and research and development funding based on activities performed at our collaborative partner’s request.

Below is a table setting forth our current licensed ADC partnerships and status of the most advanced program in

each partnership:

Partner

Licensed targets/compounds

Status of Most Advanced Program

Roche . . . . . . . . . . . . . . . . . . . . . . . . . . HER2, 4 other1

Huadong . . . . . . . . . . . . . . . . . . . . . . . . Mirvetuximab – Greater China

CytomX . . . . . . . . . . . . . . . . . . . . . . . . CD166, EpCAM

Debiopharm . . . . . . . . . . . . . . . . . . . . . CD372

Bayer . . . . . . . . . . . . . . . . . . . . . . . . . . Mesothelin

Marketed

Phase 3

Phase 2

Phase 1

Novartis . . . . . . . . . . . . . . . . . . . . . . . . cKit, pCadherin, CDH6, CCR7, 1 other1 Phase 1

Oxford BioTherapeutics/Menarini . . . CD2053

Fusion . . . . . . . . . . . . . . . . . . . . . . . . . . Undisclosed

Viridian . . . . . . . . . . . . . . . . . . . . . . . .

IGF-1R non-cancer
radiopharmaceuticals

Phase 1

1 Undisclosed.

2 Debiopharm has an exclusive license for Debio 1562 (formerly known as IMGN529).

3 Oxford BioTherapeutics and Menarini are developing MEN 1309, an ADC targeting CD205 and utilizing our DM4
payload, pursuant to a sublicense from Amgen, which in turn licensed our maytansinoid ADC technology to develop and
commercialize ADCs targeting CD205.

Below is a brief description of the business relationships underlying each of the foregoing programs. For more

information concerning these relationships, including their ongoing financial and accounting impact on our business,
please read Note C, Significant Collaborative Agreements, to our consolidated financial statements included in this
report.

Roche

In 2000, we granted Genentech, now a unit of Roche, an exclusive development and commercialization license

to use our maytansinoid technology with antibodies that target HER2. Roche’s KADCYLA resulted from this license.

KADCYLA was approved for marketing in the U.S., EU, and Japan in 2013. We are entitled to receive up to a total of
$44 million in milestone payments, of which we have received $39 million to date, and also tiered royalties on the
commercial sales of KADCYLA or any other resulting products as described below. Roche is responsible for the
development, manufacturing, and marketing of any products resulting from this license.

In 2015, Immunity Royalty Holdings, L.P. (IRH) paid us $200 million to purchase our right to receive 100% of
the royalty payments on commercial sales of KADCYLA arising under our development and commercialization license
with Genentech, until IRH had received aggregate KADCYLA royalties equal to $235 million or $260 million,
depending on when the aggregate KADCYLA royalties received by IRH reached a specified milestone. Once the
applicable threshold was met, we would thereafter have received 85% and IRH would have received 15% of the
KADCYLA royalties for the remaining royalty term. In January 2019, we sold our residual rights to receive royalty
payments on commercial sales of KADCYLA to OMERS, the defined benefit pension plan for municipal employees in
the Province of Ontario, Canada, for $65.2 million, net of fees. Simultaneously, OMERS purchased IRH’s right to the
royalties we previously sold to IRH as described above, thereby obtaining the rights to 100% of the royalties received
from that date on.

We also granted Roche, through its Genentech unit, exclusive development and commercialization licenses to

use our maytansinoid ADC technology with antibodies to four specified targets, which were granted under the terms of a
separate, now expired 2000 right-to-test agreement with Genentech. For each of these licenses, we are entitled to receive
up to a total of $38 million in milestone payments and also royalties on the sales of any resulting products. Roche is
responsible for the development, manufacturing, and marketing of any products resulting from these licenses. The
standard termination provisions discussed below apply to these licenses.

Huadong

In October 2020, we entered into a collaboration and license agreement with Hangzhou Zhongmei Huadong

Pharmaceutical Co., Ltd. (Huadong) a subsidiary of Huadong Medicine Co., Ltd., under which Huadong will exclusively
develop and commercialize mirvetuximab in the People’s Republic of China, Hong Kong, Macau, and Taiwan, which
we refer to as Greater China. Under the terms of the collaboration and license agreement, we received a non-refundable
upfront payment of $40 million and are eligible to receive additional payments of up to $265.0 million as certain
development, regulatory, and net sales milestones are achieved. We are also eligible to receive tiered low double digit to
high teen royalties as a percentage of mirvetuximab commercial sales by Huadong in Greater China. Huadong is
responsible for the development and commercialization of mirvetuximab in Greater China except in limited
circumstances. In addition, we granted Huadong a right of first negotiation if we determine to enter into an agreement to
grant a third party rights in Greater China to develop or commercialize a product, other than mirvetuximab, that
specifically binds to FR(cid:302). We retain all rights to mirvetuximab in the rest of the world. The standard termination
provisions discussed below apply to this license.

CytomX

In 2016, we granted CytomX an exclusive development and commercialization license to our maytansinoid and

IGN ADC technology for use with Probodies™ that target CD166 under a now-expired reciprocal right-to-test
agreement. We are entitled to receive up to a total of $160 million in milestone payments plus royalties on the
commercial sales of any resulting product. CytomX is responsible for the manufacturing, product development, and
marketing of any products resulting from this license. The standard termination provisions discussed below apply to this
license.

In 2017, we took exclusive development and commercialization licenses to CytomX’s proprietary Probody

technology for use with Probodies that target two specified targets under the same reciprocal right-to-test agreement. We
terminated one of these licenses for convenience prior to the end of 2017 and terminated the second license in
December 2019 in connection with the grant of the EpCAM license to CytomX discussed below.

In December 2019, we granted CytomX an exclusive development and commercialization license to our

maytansinoid and IGN ADC technology for use with antibodies (and Probodies™ developed therefrom) that target
EpCAM. In January 2020, we received a $7.5 million upfront license payment and are entitled to receive up to a total of
$355 million in milestone payments plus royalties on the commercial sales of any resulting product. CytomX is
responsible for the manufacturing, product development, and marketing of any products resulting from this license. The
standard termination provisions discussed below apply to this license.

Debiopharm

In May 2017, Debiopharm International S.A. (Debiopharm) acquired our IMGN529 program, a clinical-stage
anti-CD37 ADC for the treatment of patients with B-cell malignancies, such as non-Hodgkin lymphomas (NHL). Under
the terms of the Exclusive License and Asset Purchase agreement, we received a $25.0 million upfront payment for
specified assets related to IMGN529 and an exclusive license to additional intellectual property necessary or useful for
Debiopharm to develop and commercialize IMGN529 (now known as Debio 1562). We also received a $5.0 million
milestone payment upon transfer of certain ImmunoGen technologies related to the program and were entitled to receive
a $25.0 million milestone payment upon IMGN529 entering a Phase 3 clinical trial.

In October 2021, we and Debiopharm amended the Exclusive License and Asset Purchase agreement, pursuant

to which we are entitled to receive a percentage of all payments generated from future sublicenses of Debio 1562,
including upfront fees, milestones, and royalties, up to an aggregate of $30.0 million and in lieu of the potential $25.0
million development milestone payment under the original agreement. The standard termination provisions discussed
below apply to this agreement.

Bayer

In 2008, we granted Bayer an exclusive development and commercialization license to use our maytansinoid
ADC technology with antibodies or other proteins that target mesothelin. We are entitled to receive, for each product
developed and marketed by Bayer under this agreement, up to a total of $170.5 million in milestone payments plus
royalties on the commercial sales of any resulting products. Bayer is responsible for the development, manufacturing,
and marketing of any products resulting from this license. The standard termination provisions discussed below apply to
this license.

Novartis

We granted Novartis exclusive development and commercialization licenses to our maytansinoid and IGN ADC

technology for use with antibodies to six specified targets under a now-expired right-to-test agreement established in
2010. In May 2018, Novartis terminated one of its six development and commercialization licenses. With respect to each
remaining license, we are entitled to receive up to a total of $199.5 million in milestone payments, plus royalties on the
commercial sales of any resulting products. Novartis is responsible for the manufacturing, product development, and
marketing of any products resulting from this agreement. The standard termination provisions discussed below apply to
these licenses.

Oxford BioTherapeutics/Menarini

In 2013, we granted Amgen, Inc. (Amgen) an exclusive development and commercialization license to our

maytansinoid ADC technology for use with antibodies that target CD205 under a now-expired right-to-test agreement,
which Amgen sublicensed to Oxford BioTherapeutics, which is developing MEN 1309 with Menarini. With respect to
this license, we are entitled to receive up to a total of $34 million in milestone payments, plus royalties on the
commercial sales of any resulting products. Amgen (or its sublicensee(s)) is responsible for the manufacturing, product
development, and marketing of any products resulting from this development and commercialization license. The
standard termination provisions discussed below apply to this license.

Fusion

In December 2016, we entered into an exclusive license agreement to a specified target with Fusion

Pharmaceuticals Inc. (Fusion). We are entitled to receive up to a total of $50 million in milestone payments plus
royalties on the commercial sales of any resulting products. Fusion is responsible for the manufacturing, development,
and marketing of any products resulting from the license. The standard termination provisions discussed below apply to
this license.

Viridian

In October 2020, we entered into a license agreement with Viridian Therapeutics, Inc. (Viridian) pursuant to
which we granted Viridian the exclusive right to develop and commercialize an insulin-like growth factor-1 receptor
(IGF-1R) antibody for all non-oncology indications that do not use radiopharmaceuticals in exchange for an upfront
payment, with the potential to receive up to a total of $143.0 million in milestone payments plus royalties on the
commercial sales of any resulting product. Viridian is responsible for the manufacturing, development, and marketing of
any products resulting from the license agreement. The standard termination provisions discussed below apply to this
license.

Standard Termination Provisions

Standard termination provisions in our license agreements state that the partner may terminate the agreement

for convenience at any time upon prior written notice to us. The agreement may also be terminated by either party for a
material breach by the other, subject to notice and cure provisions. We may also terminate certain of these agreements
upon the occurrence of specified events. Upon termination, the partner’s rights to our intellectual property with respect
to the applicable target are canceled and could then be used by us or re-licensed for that target. Unless earlier terminated,
each agreement will continue in effect until the expiration of partner’s royalty obligations, which are determined on a
product-by-product and country-by-country basis. For each product and country, royalty obligations commence upon
first commercial sale of that product in that country and extend until the later of either the expiration of the last-to-expire
ImmunoGen patent covering that product in that country or the expiration for that country of the minimum royalty
period specified in the agreement.

Other Agreements

From time to time, we have entered into additional agreements with some of our collaborators pursuant to

which we have provided certain Chemistry, Manufacturing and Controls (CMC)-related development and pre-pivotal
ADC manufacturing services, or supplied ADC payloads, with respect to products they are developing under their
licenses with us, with respect to which we have been entitled to receive payments at mutually negotiated rates.

Patents, Trademarks and Trade Secrets

ImmunoGen has a substantial and robust intellectual property portfolio comprising nearly 1,500 issued patents
and over 600 pending patent applications on a worldwide basis. Our intellectual property strategy centers on obtaining
high quality patent protection directed to various embodiments of our proprietary technologies and product candidates.
Using this strategy, our ADC technology and our product candidates are protected through a multi-layered approach. In
this regard, we have patents and patent applications covering antibodies and other cell binding agents, linkers, cytotoxic
payload agents (e.g., tubulin-acting maytansinoids, DNA-alkylating IGNs, and DNA-acting camptothecins), conjugation
methodologies and complete ADCs, comprising one or more of these components, as well as methods of making and
using each of the above. Typically, multiple issued patents and pending patent applications cover various embodiments
of each of ImmunoGen’s and our licensees’ product candidates.

We consider our tubulin-acting maytansinoid, DNA-alkylating IGN, and DNA-acting camptothecin cytotoxic

payload agent technologies to be key components of our overall patent strategy. With regard to our tubulin-acting
maytansinoid cytotoxic payload agents, we currently own 22 issued U.S. patents covering various embodiments of our
maytansinoid technology including those with claims directed to certain maytansinoids, including DM4 and DM21, and
methods of manufacturing of DM1, DM4, and DM21, as well as methods of using the same. These issued patents
remain in force until various times between 2022 and 2038. With regard to our IGN payload agents, we have 35 issued
U.S. patents covering various aspects of our DNA-acting cytotoxic payload agents, which will expire at various times
between 2030 and 2042. With regard to our camptothecin agents, we have an issued U.S. patent covering various aspects
of our camptothecin cytotoxic payload agents, which expires in 2040. In all cases, we have received or are applying for
comparable patent protection in other major commercial and manufacturing jurisdictions, including Europe, Japan, and
China. In nearly all cases for our maytansinoid, IGN, and camptothecin patent portfolios, we have additional pending
patent applications disclosing and claiming many other related and strategically important embodiments of these
technologies which, upon issuance or grant, will extend our patent protection term over these technologies by several
additional years.

Our intellectual property strategy also includes pursuing patents directed to linkers, antibodies, conjugation
methods, ADC formulations and the use of specific antibodies and ADCs to treat certain diseases. In this regard, we
have 22 issued patents related to many of our linker technologies, as well as additional pending patent applications
disclosing and claiming many other related and strategically important embodiments of these linker technologies,
including methods of making the linkers and antibody maytansinoid conjugates comprising these linkers. These issued
patents remain in force until various times between 2023 and 2034. We also have 20 issued U.S. patents covering
methods of assembling ADCs from their constituent antibody, linker, and cytotoxic payload agent moieties. These issued
patents will expire between 2026 and 2040. In nearly all instances for both our linker and conjugation patent portfolios,
we have additional pending patent applications disclosing and claiming many other related and strategically important
embodiments of these technologies which, upon issuance or grant, would extend our patent protection term over these
technologies by several additional years. In all cases, we have received or are applying for comparable patents in other
major commercial and manufacturing jurisdictions including Europe, Japan, and China.

We also file, prosecute, and maintain a substantial portfolio of patents and patent applications specifically

directed to ImmunoGen’s and our licensees’ ADC candidates. In this regard, we craft a detailed patent protection
strategy for each ADC as it approaches clinical evaluation. Such strategies make use of the patents and patent
applications described in the preceding paragraphs, as well as ADC-specific filings, to create a multi-layered and multi-
jurisdictional patent protection approach for each ADC as it enters the clinic. In addition to the platform patent strategy
described above and specific to mirvetuximab, we have 21 issued U.S. patents and 13 pending U.S. applications
covering various embodiments of the composition of matter and methods of treatment using mirvetuximab, expiring at
various times between 2031 and 2042. These ADC-specific patent strategies are intended to provide the exclusivity basis
for revenue and royalties arising from commercial development of each of ImmunoGen’s and our licensees’ ADCs.

We expect our continued independent and collaborative work in each of these areas will lead to other patent

applications. We will be the owner of all patents covering our independently generated inventions. In all other instances,
we expect to either be the sole owner or co-owner of any patents covering collaboratively generated inventions insofar as
they relate to co-developed products or our ADC platform technology, or otherwise have an exclusive or non-exclusive
license to the technology covered by such patents.

We cannot provide assurance that pending patent applications will issue as patents or that any patents, if issued,

will provide us with adequate protection against competitors with respect to the covered products, technologies, or
processes. Defining the scope and term of patent protection involves complex legal and factual analyses and, at any
given time, the result of such analyses may be uncertain. In addition, other parties may challenge our patents in litigation
or administrative proceedings resulting in a partial or complete loss of certain patent rights owned or controlled by
ImmunoGen. Furthermore, as a patent does not confer any specific freedom to operate, other parties may have patents
that may block or otherwise hinder the development and commercialization of our technology.

In addition, many of the processes and much of the know-how that are important to us depend upon the skills,
knowledge, and experience of our key scientific and technical personnel, which skills, knowledge, and experience are
not patentable. To protect our rights in these areas, we require that all employees, consultants, advisors, and
collaborators enter into confidentiality agreements with us. Further, we require that all employees enter into assignment
of invention agreements as a condition of employment. We cannot provide assurance, however, that these agreements
will provide adequate or any meaningful protection for our trade secrets, know-how, or other proprietary information in
the event of any unauthorized use or disclosure of such trade secrets, know-how, or proprietary information. Further, in
the absence of patent protection, we may be exposed to competitors who independently develop substantially equivalent
technology or otherwise gain access to our trade secrets, know-how, or other proprietary information.

Competition

We focus on highly competitive areas of product development. Our competitors include major pharmaceutical
companies and other biotechnology firms. For example, Pfizer, Seattle Genetics, Roche, Astellas, AstraZeneca, Daiichi
Sankyo, GlaxoSmithKline, AbbVie, and the Menarini Group have programs to attach a cell-killing small molecule to an
antibody for targeted delivery to cancer cells. Pharmaceutical and biotechnology companies, as well as other institutions,
also compete with us for promising targets for antibody-based therapeutics, for obtaining licenses and collaboration
agreements with other companies to develop targets for antibody-based therapeutics, and in recruiting highly qualified
scientific personnel. Additionally, there are non-ADC therapies available and/or in development for the cancer types we
and our partners are targeting. Many competitors and potential competitors have substantially greater scientific, research
and product development capabilities, as well as greater financial, sales, marketing, and human resources than we do. In
addition, many specialized biotechnology firms have formed collaborations with large, established companies to support
the research, development, and commercialization of products that may be competitive with ours.

In particular, competitive factors within the antibody and cancer therapeutic market include:
•
•

the timing of regulatory approvals and commercial introductions;

the safety, efficacy, and convenience of products;

•

special regulatory designation of products, such as orphan drug and breakthrough therapy designations; and

the effectiveness of marketing, sales, and reimbursement efforts.

Our competitive position depends on a combination of factors. These include effectively pursuing the
development of proprietary products, the implementation of clinical development programs, the ability to appropriately
manufacture, sell, and market our products, and obtain patent protection for our products. In addition, we must secure
sufficient capital resources to accomplish all of the previously mentioned activities.

Continued development of conventional and targeted chemotherapeutics by large pharmaceutical companies

and biotechnology companies may result in new compounds that may compete with our product candidates. Antibodies
developed by certain of these companies have been approved for use as cancer therapeutics. In the future, new antibodies
or other targeted therapies may compete with our product candidates. Other companies have created or have programs to
create potent cell-killing agents for attachment to antibodies. These companies may compete with us for technology
out-license arrangements.

Managing the Impact of the COVID-19 Pandemic

Since the first quarter of 2020, we have continued to move our clinical studies forward while adapting to meet

the evolving challenges of the COVID-19 pandemic. We implemented business continuity plans in March 2020 that
enabled our workforce to remain productive while working from home until mid-September 2021, at which time our
workforce returned to the office. From a manufacturing and supply chain perspective, we believe we have sufficient
inventory on hand for all of our ongoing and near-term studies and to support the launch of mirvetuximab, if approved.
From a regulatory perspective, since the beginning of the pandemic, we have received timely reviews of our submissions
to the U.S. Food and Drug Administration (FDA) and other health authorities covering our clinical trial applications.

The impact of COVID-19 slowed site activation and patient enrollment for both SORAYA and MIRASOL,

which resulted in a limited delay in patient accrual for each of these studies.

Regulatory Matters

Government Regulation and Product Approval

Government authorities in the U.S., at the federal, state, and local level, and other countries extensively
regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling,
packaging, storage, record-keeping, promotion, advertising, distribution, marketing, and export and import of products
such as those we are developing. A new drug must be approved by the FDA through the new drug application, or NDA,
process and a new biologic must be approved by the FDA through the biologics license application, or BLA, process
before it may be legally marketed in the U.S.

U.S. Drug Development Process

In the U.S., the FDA regulates drugs under the federal Food, Drug, and Cosmetic Act (FDCA) and in the case
of biologics, also under the Public Health Service Act (PHSA) and implementing regulations. The process of obtaining
regulatory approvals and the subsequent compliance with applicable federal, state, and local statutes and regulations
require the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S.
requirements at any time during the product development process, approval process, or after approval, may subject an
applicant to adverse administrative or judicial actions. These actions could include the FDA’s refusal to approve pending
applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, total or partial
suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement,
or civil or criminal penalties. Any such administrative or judicial action could have a material adverse effect on our
business.

The process required by the FDA before a drug or biologic may be marketed in the U.S. generally involves the

following:
•

•
•

•

completion of preclinical and other nonclinical laboratory tests, animal studies, and formulation studies
according to current Good Laboratory Practices (cGLP) or other applicable regulations;

submission to the FDA of an IND, which must become effective before human clinical trials may begin;

performance of adequate and well-controlled human clinical trials according to current Good Clinical
Practices (cGCP) to establish the safety and efficacy of the proposed drug for its intended use;

development and approval of a companion diagnostic if the FDA or the sponsor believes that its use is
essential for the safe and effective use of a corresponding product;

submission to the FDA of an NDA or BLA;

satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is
produced to assess compliance with current Good Manufacturing Practice (cGMP) to assure that the
facilities, methods, and controls are adequate to preserve the drug’s identity, strength, quality, and purity;
and

• FDA review and approval of the NDA or BLA.

Once a pharmaceutical candidate is identified for development, it enters the preclinical testing stage. Preclinical

tests include laboratory evaluations of product chemistry, toxicity, and formulation, as well as animal studies. An IND
sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to
the FDA as part of the IND. The sponsor will also include a clinical protocol detailing, among other things, the
objectives of the first phase of the clinical trial, the parameters to be used in monitoring safety, and the effectiveness
criteria to be evaluated, if the first phase lends itself to an efficacy evaluation. Some nonclinical testing may continue
even after the IND is submitted and clinical trials have begun. The IND automatically becomes effective 30 days after
receipt by the FDA, unless the FDA, within the 30-day time period, places the clinical trial on a clinical hold. In such a
case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical
holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns about ongoing
or proposed clinical trials or non-compliance with specific FDA requirements, and the trials may not begin or continue
until the sponsor submits additional information that alleviates FDA concerns, and the FDA notifies the sponsor that the
hold has been lifted.

Each clinical trial must be conducted under the supervision of one or more qualified investigators in accordance

with cGCP requirements in accordance with a protocol for each phase of the clinical trial included as part of the IND,
and timely safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events.
A local or central institutional review board (IRB) acting on behalf of each institution participating in the clinical trial
must review and approve each protocol before a clinical trial commences at that institution and must also approve the
information regarding the trial and the consent form that must be provided to each trial subject or his or her legal
representative, monitor the study until completed, and otherwise comply with IRB regulations.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:
• Phase 1: The product candidate is initially introduced into healthy human subjects and tested for safety

and dosage tolerance, absorption, metabolism, distribution, and excretion. In the case of some products for
severe or life-threatening diseases, such as cancer, especially when the product may be too inherently toxic
to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.
• Phase 2: This phase involves clinical trials in a limited patient population to identify possible adverse

effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases
and to determine dosage tolerance and optimal dosage.

• Phase 3: These trials are undertaken to further evaluate dosage, clinical efficacy, and safety in an

expanded patient population at geographically dispersed clinical study sites and to establish the overall
risk-benefit ratio of the product candidate and provide, if appropriate, an adequate basis for product
labeling.

Post-approval trials, sometimes referred to as Phase 4, may be conducted after initial marketing approval. These

trials are used to gain additional information about the use of the approved drug in the treatment of patients in the
intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as
a condition of approval of an NDA or BLA.

The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the

research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or
terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the
IRB’s requirements or if the drug has been associated with unexpected or serious patient reactions. Additionally, some
clinical trials are overseen by an independent group of qualified experts organized by the sponsor, known as a data safety
monitoring board or committee. Depending on its charter, this group may determine whether a trial may move forward at
designated check points based on access to certain data from the trial. Phase 1, Phase 2, and Phase 3 testing may not be
completed successfully within any specified period, if at all.

During the development of a new drug, sponsors may request meetings with the FDA to share information

about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach agreement on
the next phase of development.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop

additional information about the chemistry and physical characteristics of the drug and finalize a process for
manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process
must be capable of consistently producing quality batches of the product candidate and, among other things, the

manufacturer must develop methods for testing the identity, strength, quality, and purity of the final drug. Additionally,
appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the
product candidate does not undergo unacceptable deterioration over its shelf life.

While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies
performed since the last progress report must be submitted at least annually to the FDA, and written IND safety reports
must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from
other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in
vitro testing suggesting a significant risk to humans, and any clinically important increased incidence of a serious
suspected adverse reaction compared to that listed in the protocol or investigator brochure.

There are also requirements governing the reporting of ongoing clinical trials and completed trial results to

public registries. Most sponsors of clinical trials of FDA-regulated products are required to register and disclose
specified clinical trial information, which is publicly available at www.clinicaltrials.gov. Information related to the
product, patient population, phase of investigation, trial sites and investigators, and other aspects of the clinical trial is
then made public as part of the registration. Sponsors are also obligated to discuss the results of their clinical trials after
completion. Disclosure of the results of these trials can be delayed until the new product or new indication being studied
has been approved. However, there are evolving rules and increasing requirements for publication of all trial-related
information, and it is possible that data and other information from trials involving drugs that never garner approval
could require disclosure in the future.

Companion Diagnostics

For some of our product candidates, including mirvetuximab and potentially others, we plan to work with

collaborators to develop or obtain access to in vitro companion diagnostic tests to identify appropriate patients for these
targeted therapies.

If the FDA believes that a diagnostic test is essential for the safe and effective use of a corresponding
therapeutic product, the FDA may require the sponsor to develop, and obtain contemporaneous clearance or approval for
a companion diagnostic. Companion diagnostics can be used to identify patients likely to be more responsive to a
particular therapy or at increased risk for serious side effects as a result of treatment with a particular therapeutic
product. They may also be useful for monitoring the response to treatment for the purpose of adjusting treatment or
doses to achieve improved safety or effectiveness.

Companion diagnostics are regulated by the FDA as medical devices. The FDA indicated that it would apply a

risk-based approach to determine the regulatory pathway for companion diagnostics. This means that the regulatory
pathway will depend on the level of risk to patients, based on the intended use of the companion diagnostic device and
the controls necessary to provide a reasonable assurance of safety and effectiveness. The two primary types of marketing
pathways for medical devices are clearance of a premarket notification under Section 510(k) of the Federal Food, Drug,
and Cosmetic Act, or 510(k), and approval of a premarket approval application (PMA). We expect that any companion
diagnostic developed for use with our drug candidates will utilize the PMA pathway. If the diagnostic test and the
therapeutic drug are studied together to support their respective approvals, the clinical trial must meet both the IND
requirements and FDA’s companion diagnostic requirements that apply to clinical trials of significant risk devices.

The FDA expects that the therapeutic sponsor will address the need for a companion diagnostic device in its

therapeutic product development plan and that, in most cases, the therapeutic product and its corresponding companion
diagnostic device will be developed contemporaneously.

PMAs must be supported by valid scientific evidence, which typically requires extensive data, including

technical, preclinical, clinical, and manufacturing data, to demonstrate to the FDA’s satisfaction the safety and
effectiveness of the device. For diagnostic tests, a PMA typically includes data regarding analytical and clinical
validation studies. As part of its review of the PMA, the FDA will conduct a pre-approval inspection of the
manufacturing facility or facilities to ensure compliance with the Quality System Regulation (QSR) which requires
manufacturers to follow design, testing, control, documentation, and other quality assurance procedures. FDA review of
an initial PMA may require several years to complete.

After approval, the use of a companion diagnostic device with a therapeutic product will be stipulated in the

instructions for use in the labeling of both the diagnostic device and the corresponding therapeutic product. In addition, a
diagnostic test that was approved through the PMA process or one that was cleared through the 510(k) process and
placed on the market will be subject to similar regulatory requirements that apply to approved drugs.

U.S. Review and Approval Processes

The results of product development, preclinical and other non-clinical studies, and clinical trials, along with
descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling,
and other relevant information are submitted to the FDA as part of an NDA or BLA requesting approval to market the
product. The submission of an NDA or BLA is subject to the payment of user fees; a waiver of such fees may be
obtained under certain limited circumstances. The FDA reviews all NDAs and BLAs submitted to ensure that they are
sufficiently complete for substantive review before it accepts them for filing. The FDA may request additional
information rather than accept an NDA or BLA for filing. In this event, the NDA or BLA must be resubmitted with the
additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. Once
the submission is accepted for filing, the FDA begins an in-depth substantive review. FDA may refer the NDA or BLA
to an advisory committee for review, evaluation, and recommendation as to whether the application should be approved
and under what conditions. The FDA is not bound by the recommendation of an advisory committee, but it generally
follows such recommendations. The approval process is lengthy and often difficult, and the FDA may refuse to approve
an NDA or BLA if the applicable regulatory criteria are not satisfied or may require additional clinical or other data and
information. Even if such data and information are submitted, the FDA may ultimately decide that the NDA or BLA
does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive and the FDA may
analyze and interpret data differently than we analyze and interpret the same data. The FDA reviews an NDA to
determine, among other things, whether a product is safe and effective for its intended use and whether its manufacturing
is cGMP-compliant to assure and preserve the product’s identity, strength, quality, and purity. The FDA reviews a BLA
to determine, among other things whether the product is safe, pure, and potent and the facility in which it is
manufactured, processed, packed, or held meets standards designed to assure the product’s continued safety, purity, and
potency. Before approving an NDA or BLA, the FDA will inspect the facility or facilities where the product is
manufactured to assure compliance with cGMPs and may also inspect clinical trial sites to assure compliance with
GCPs.

NDAs or BLAs receive either standard or priority review. Priority review, which is requested at the time of
BLA or NDA submission, is designed to expedite the review for drugs that provide meaningful therapeutic benefit to
patients over existing treatments. Priority review for an NDA for a new molecular entity and original BLAs will be
6 months from the date that the NDA or BLA is filed, compared to 10 months under standard review. Although FDA’s
goal is to take action on priority review applications within 6 months, the agency does not always meet this goal and the
review process may be significantly extended by FDA requests for additional information or clarification. Priority
review does not change the standards for approval, but may expedite the approval process.

After the FDA evaluates an NDA or BLA, it will issue an approval letter or a Complete Response Letter. An

approval letter authorizes commercial marketing of the drug with prescribing information for specific indications. A
Complete Response Letter indicates that the review cycle of the application is complete, and the application will not be
approved in its present form. A Complete Response Letter usually describes the specific deficiencies in the NDA or
BLA identified by the FDA and may require additional clinical data, such as an additional Phase 3 trial or other
significant and time-consuming requirements related to clinical trials, nonclinical studies, or manufacturing. If a
Complete Response Letter is issued, the sponsor has one year to resubmit the NDA or BLA, addressing all of the
deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the
FDA may decide that the NDA or BLA does not satisfy the criteria for approval.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases and

dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. In
addition, the FDA may require a sponsor to conduct Phase IV testing which involves clinical trials designed to further
assess a drug’s safety and effectiveness after NDA or BLA approval and may require testing and surveillance programs
to monitor the safety of approved products which have been commercialized. The FDA may also place other conditions
on approval including the requirement for a risk evaluation and mitigation strategy (REMS) to assure the safe use of the
drug. If the FDA concludes a REMS is needed, the sponsor of the NDA or BLA must submit a proposed REMS. The
FDA will not approve the NDA or BLA without an approved REMS, if required. A REMS could include medication
guides, physician communication plans, or other elements to assure safe use, such as restricted distribution methods,
patient registries, and other risk minimization tools. Any of these limitations on approval or marketing could restrict the
commercial promotion, distribution, prescription, or dispensing of products. Marketing approval may be withdrawn for
non-compliance with regulatory requirements or if problems occur following initial marketing.

The Pediatric Research Equity Act (PREA) requires a sponsor to conduct pediatric clinical trials for most drugs

and biologics, for a new active ingredient, new indication, new dosage form, new dosing regimen, or new route of
administration. Under PREA, original NDAs, BLAs, and supplements thereto, must contain a pediatric assessment

unless the sponsor has received a deferral or waiver. The required assessment must evaluate the safety and effectiveness
of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration
for each pediatric subpopulation for which the product is safe and effective. The sponsor or FDA may request a deferral
of pediatric clinical trials for some or all of the pediatric subpopulations. A deferral may be granted for several reasons,
including a finding that the drug or biologic is ready for approval for use in adults before pediatric clinical trials are
complete or that additional safety or effectiveness data need to be collected before the pediatric clinical trials begin.
Orphan indications are exempt from PREA. The FDA must send a non-compliance letter to any sponsor that fails to
submit the required assessment, keep a deferral current, or fails to submit a request for approval of a pediatric
formulation.

Patent Term Restoration and Marketing Exclusivity

Depending upon the timing, duration, and specifics of FDA approval of our drugs, some of our U.S. patents

may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of
1984, referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term
of up to five years as compensation for patent term lost during product development and the FDA regulatory review
process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from
the product’s approval date. The patent term restoration period is generally one-half the time between the effective date
of an IND, and the submission date of an NDA or BLA, plus the time between the submission date of an NDA or BLA
and the approval of that application. Only one patent applicable to an approved drug is eligible for the extension, and the
extension must be applied for prior to expiration of the patent. The U.S. Patent and Trademark Office, in consultation
with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we intend
to apply for restorations of patent term for some of our currently owned or licensed patents to add patent life beyond
their current expiration date, depending on the expected length of clinical trials and other factors involved in the filing of
the relevant NDA.

Pediatric exclusivity is a type of marketing exclusivity available in the U.S. Under the Best Pharmaceuticals for

Children Act (BPCA) an additional six months of marketing exclusivity may be available if a sponsor conducts clinical
trials in children in response to a written request from the FDA (Written Request). If the Written Request does not
include clinical trials in neonates, the FDA is required to include its rationale for not requesting those clinical trials. The
FDA may request studies on approved or unapproved indications in separate Written Requests. The issuance of a
Written Request does not require the sponsor to undertake the described clinical trials. To date, we have not received any
Written Requests.

Biologics Price Competition and Innovation Act of 2009

The Patient Protection and Affordable Care Act, which included the Biologics Price Competition and

Innovation Act of 2009 (BPCIA), amended the PHSA to create an abbreviated approval pathway for two types of
“generic” biologics—biosimilars and interchangeable biologic products, and provides for a twelve-year data exclusivity
period for the first approved biological product, or reference product, against which a biosimilar or interchangeable
application is evaluated; however if pediatric clinical trials are performed and accepted by the FDA, the twelve-year data
exclusivity period will be extended for an additional six months. A biosimilar product is defined as one that is highly
similar to a reference product notwithstanding minor differences in clinically inactive components and for which there
are no clinically meaningful differences between the biological product and the reference product in terms of the safety,
purity, and potency of the product. An interchangeable product is a biosimilar product that meets additional requirements
that show, among other things, that the product will produce the same clinical result as the reference product in any
given patient. In addition, for products administered to a patient more than once, the effects of switching back and forth
between the interchangeable product and a reference product on safety and efficacy will have to be evaluated. An
interchangeable product may be substituted for the reference product without the intervention of the health care provider
who prescribed the reference product.

The biosimilar applicant must demonstrate that the product is biosimilar based on data from (1) analytical
studies showing that the biosimilar product is highly similar to the reference product; (2) animal studies (including
toxicity); and (3) one or more clinical trials to demonstrate safety, purity, and potency in one or more appropriate
conditions of use for which the reference product is approved. In addition, the applicant must show that the biosimilar
and reference products have the same mechanism of action for the conditions of use on the label, route of administration,
dosage, and strength, and the production facility must meet standards designed to assure product safety, purity, and
potency.

An application for a biosimilar product may not be submitted until four years after the date on which the
reference product was first approved. The first approved interchangeable biologic product will be granted an exclusivity

period of up to one year after it is first commercially marketed, but the exclusivity period may be shortened under certain
circumstances.

The FDA has issued a number of final and draft guidance documents in order to implement the law and will

likely continue to publish new guidance as new issues relating to biosimilars and interchangeability are identified. The
guidance documents provide FDA’s current thinking on approaches to demonstrating that a proposed biological product
is biosimilar to or interchangeable with, a reference product. Although the FDA intends to issue additional guidance
documents in the future, the absence of final guidance documents covering all issues does not prevent a sponsor from
seeking licensure of a biosimilar or interchangeable product under the BPCIA, as evidenced by the products already
approved by the FDA.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare

disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the U.S., or
more than 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing
and making available in the U.S. a drug for this type of disease or condition will be recovered from sales in the U.S. for
that drug. Orphan drug designation must be requested before submitting an NDA or BLA. After the FDA grants orphan
drug designation, the identity of the therapeutic agent and its potential orphan use will be disclosed publicly by the FDA;
the posting will also indicate whether a drug is no longer designated as an orphan drug. More than one product candidate
may receive an orphan drug designation for the same indication. Orphan drug designation does not convey any
advantage in or shorten the duration of the regulatory review and approval process.

If a product that has orphan drug designation subsequently receives the first FDA approval for the disease for

which it has such designation, the product is entitled to seven years of orphan product exclusivity. Orphan product
exclusivity means that the FDA cannot approve another sponsor’s marketing application for the same product for the
same indication, except in very limited circumstances. For example, the FDA may approve a subsequent application for
the same product in the same indication if the product is clinically superior to the previously approved drug. Orphan
drug exclusivity could block the approval of one of our products for seven years if a competitor obtains approval of the
same drug as defined by the FDA and we are not able to show the clinical superiority of our drug or if our product
candidate is determined to be contained within the competitor’s product for the same indication or disease. The FDA
continues to periodically provide additional clarification, and in July 2018 published a final guidance entitled,
“Clarification of Orphan Designation of Drugs and Biologics for Pediatric Subpopulations of Common Diseases.”

Mirvetuximab has been granted orphan drug designation by the FDA in the United States, and orphan medicinal

product status by the European Medicines Agency (EMA) in the European Union for the treatment of ovarian cancer.
Pivekimab has been granted orphan drug designation by the FDA for the treatment of AML and BPDCN and by the
EMA for the treatment of BPDCN. In the U.S., if mirvetuximab receives FDA marketing approval for the use for which
the orphan drug status was granted, we could be entitled to seven years of market exclusivity that would begin on the
date of approval. In the EU, orphan designation could provide us with ten years of market exclusivity that would begin
after mirvetuximab receives marketing authorization for the use for which it was granted. We may pursue these
designations for other indications for other product candidates intended for qualifying patient populations.

Expedited Review and Approval; Breakthrough Therapy Designation

The FDA has various programs, including Fast Track and accelerated approval, that are intended to expedite or
simplify the process for reviewing drugs, and/or provide for approval on the basis of surrogate endpoints. Even if a drug
qualifies for one or more of these programs, the FDA may later decide that the drug no longer meets the conditions for
qualification or that the time period for FDA review or approval will not be shortened. Generally, drugs that may be
eligible for these programs are those for serious or life-threatening conditions, those with the potential to address unmet
medical needs, and those that offer meaningful benefits over existing treatments. For example, Fast Track is a process
designed to facilitate the development, and expedite the review, of drugs to treat serious diseases and fill an unmet
medical need. The request may be made at the time of IND submission and generally no later than the pre-BLA or
pre-NDA meeting. The FDA will respond within 60 calendar days of receipt of the request. Although Fast Track does
not affect the standards for approval, the FDA will attempt to facilitate early and frequent meetings with a sponsor of a
Fast Track designated drug.

Breakthrough Therapy designation is designed to expedite the development and review of drugs that are
intended to treat a serious condition where preliminary clinical evidence indicates that the drug may demonstrate
substantial improvement over available therapy on a clinically significant endpoint(s). A sponsor may request
Breakthrough Therapy designation at the time that the IND is submitted, or no later than at the end-of-Phase 2 meeting.

The FDA will respond to a Breakthrough Therapy designation request within sixty days of receipt of the request. A drug
that receives Breakthrough Therapy designation is eligible for all fast track designation features, intensive guidance on
an efficient drug development program, beginning as early as Phase I, and commitment from the FDA involving senior
managers. In October 2020, we announced that the FDA granted Breakthrough Therapy designation for pivekimab for
the treatment of patients with relapsed or refractory BPDCN.

Accelerated approval provides an earlier approval of drugs to treat serious diseases, and that fill an unmet
medical need based on a surrogate endpoint that is reasonably likely to predict clinical benefit. The FDA may grant
accelerated approval to a product designed to treat a serious or life-threatening condition that demonstrates an effect on a
surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure
that is thought to predict clinical benefit, but is not itself a measure of clinical benefit or on an intermediate clinical
endpoint that is reasonably likely to predict an effect on irreversible morbidity, mortality, or other clinical benefit.
Discussions with the FDA about the feasibility of an accelerated approval typically begin early in the development of the
drug in order to identify, among other things, an appropriate endpoint. Accelerated approval does not change the
standards for approval, but may expedite the approval process. As a condition of approval, the FDA may require that a
sponsor of a drug receiving accelerated approval perform post-marketing clinical trials to confirm the appropriateness of
the surrogate marker trial. Failure to conduct required post-approval studies, confirm a clinical benefit during post-
marketing studies, or dissemination of false or misleading promotional materials would allow the FDA to withdraw the
product from the market on an expedited basis. All promotional materials for therapeutic candidates approved under
accelerated regulations are subject to prior review by the FDA. Based on the results of SORAYA, we expect to submit
an application for accelerated approval of mirvetuximab in the applicable patient population to the FDA. If we receive
accelerated approval, we plan to seek full approval on the basis of the confirmatory Phase 3 MIRASOL trial.

Post-Approval Requirements

Once an approval is granted, the sponsor will be required to comply with all post-approval regulatory
requirements as well as any specific post-approval commitments that the sponsor has undertaken as part of the approval
process. After approval, some types of changes to the approved product, such as adding new indications, certain
manufacturing changes, additional labeling claims, and required additional testing are subject to further FDA review and
approval. Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are
required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced
inspections by the FDA and certain state agencies for compliance with cGMP and other laws and regulations. We rely,
and expect to continue to rely, on third parties for the production of clinical and commercial quantities of our products.
Future inspections by the FDA and other regulatory agencies may identify compliance issues at the facilities of our
contract manufacturers that may disrupt production or distribution or require substantial resources to correct.

Any drug products manufactured or distributed by us or our partners pursuant to FDA approvals are subject to

continuing regulation by the FDA, including, among other things, record-keeping requirements, reporting of adverse
experiences with the drug, providing the FDA with updated safety and efficacy information, drug sampling and
distribution requirements, complying with certain electronic records and signature requirements, and complying with
FDA promotion and advertising requirements. Compliance with these requirements will require us to expend significant
time, money, and effort.

FDA strictly regulates labeling, advertising, promotion, and other types of information on products that are

placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions
of the approved label. If a company, including any agent of the company or anyone speaking on behalf of the company,
is found to have promoted the drug for an indication that is not in the approved label, the company may become subject
to adverse public relations and administrative and judicial enforcement by the FDA, the Department of Justice, or the
Office of the Inspector General of the Department of Health and Human Services, as well as state authorities. This could
subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal
fines and agreements that materially restrict the manner in which a company promotes or distributes drug products. The
federal government has levied large civil and criminal fines against companies for alleged improper promotion and has
also requested that companies enter into consent decrees or permanent injunctions under which specified promotional
conduct is changed or curtailed.

The FDA may withdraw an approval if compliance with regulatory standards is not maintained or if problems
occur after the product reaches the market. Later discovery of previously unknown problems with a product, including
adverse events of unanticipated severity or frequency, or with manufacturing processes, may result in revisions to the
approved labeling to add new safety information, requirements to conduct post-market studies or clinical trials to assess

new safety risks, or imposition of distribution or other restrictions under a REMS. Other potential consequences include,
among other things:
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restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from
the market, or product recalls;
the issuance of safety alerts, Dear Healthcare Provider letters, press releases or other communications
containing warnings or other safety information about the product;
fines, warning letters or holds on post-approval clinical trials;
refusal of the FDA to approve applications or supplements to approved applications, or suspension or
revocation of product approvals;
product seizure or detention, or refusal to permit the import or export of products;
injunctions or the imposition of civil or criminal penalties; and
consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare
programs, or mandated modification of promotional materials and labeling and issuance of corrective
information, that may result in restrictions on the product or even complete withdrawal of the product
from the market.

From time to time, legislation is drafted, introduced, and passed in Congress that could significantly change the

statutory provisions governing the approval, manufacturing, and marketing of products regulated by the FDA. It is
impossible to predict whether further legislative changes will be enacted, or FDA regulations, guidance, or
interpretations changed, or what the impact of such changes, if any, may be.
Other Healthcare Laws

In the U.S., activities of pharmaceutical manufacturers are subject to numerous other federal, state, and local

laws designed to, for example, prevent fraud and abuse; promote transparency in interactions with others in the
healthcare industry; protect the privacy of individual information; and ensure integrity of research or protect human
subjects involved in research. These laws are enforced by various federal and state enforcement authorities.

Although we currently have no products approved for commercial sale, if we obtain marketing approval for any
product candidates in the future, we may be subject to various federal and state laws pertaining to health care “fraud and
abuse,” including anti-kickback laws (which typically prohibit soliciting, offering, receiving, or paying anything of value
to generate healthcare business), and false claims laws (which generally prohibit anyone from knowingly and willingly
presenting, or causing to be presented, any false or fraudulent claims for payment for reimbursed drugs or services to
third-party payors (including Medicare and Medicaid)). Laws and regulations have also been enacted by the federal
government and various states to regulate the sales and marketing practices of pharmaceutical manufacturers with
marketed products, including laws that require manufacturers to adopt certain compliance standards or to disclose
financial interactions with health care providers to the government and public. Although the specific provisions of these
laws vary, their scope is generally broad and there may not be regulations, guidance, or court decisions that apply the
laws to particular industry practices.

Given the lack of clarity in laws and their implementation, any future activities (if we obtain approval and/or

reimbursement from federal healthcare programs for our product candidates) could be subject to challenge.

We may be subject to privacy and security laws in the various jurisdictions in which we operate, obtain, or store

personally identifiable information. Numerous U.S. federal and state laws govern the collection, use, disclosure, and
storage of personal information. See “Risk Factors - Risks Related to Our Business and Industry.”

If our operations are found to be in violation of any of such laws or any other governmental regulations that
apply to us, we may be subject to penalties, including, without limitation, administrative, civil and criminal penalties,
damages, fines, disgorgement, the curtailment or restructuring of our operations, exclusion from participation in federal
and state healthcare programs, and imprisonment, any of which could adversely affect our ability to operate our business
and our financial results.

Foreign Regulation

In addition to regulations in the U.S., we will be subject to a variety of foreign regulations governing clinical
trials and commercial sales and distribution of our products. Whether or not we obtain FDA approval for a product, we
must obtain approval by the comparable regulatory authorities of foreign countries or economic areas, such as the
European Union, before we may commence clinical trials or market products in those countries or areas. The approval
process and requirements governing the conduct of clinical trials, product licensing, pricing, and reimbursement vary
greatly from place to place, and the time may be longer or shorter than that required for FDA approval.

Under European Union regulatory systems, a company may submit marketing authorization applications either
under a centralized or decentralized procedure. The centralized procedure, which is compulsory for medicinal products
produced by biotechnology or those medicinal products containing new active substances for specific indications such as
the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, viral diseases, and designated orphan medicines,
and optional for other medicines which are highly innovative. Under the centralized procedure, a marketing application
is submitted to the EMA where it will be evaluated by the Committee for Medicinal Products for Human Use. A
favorable opinion typically results in the grant by the EMA of a single marketing authorization that is valid for all
European Union member states within 67 days of receipt of the opinion. The initial marketing authorization is valid for
five years, but once renewed is usually valid for an unlimited period. The decentralized procedure provides for approval
by one or more “concerned” member states based on an assessment of an application performed by one member state,
known as the “reference” member state. Under the decentralized approval procedure, an applicant submits an
application, or dossier, and related materials to the reference member state and concerned member states. The reference
member state prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid
application. Within 90 days of receiving the reference member state’s assessment report, each concerned member state
must decide whether to approve the assessment report and related materials. If a member state does not recognize the
marketing authorization, the disputed points are eventually referred to the EMA, whose decision is binding on all
member states.

As in the U.S., we may apply for designation of a product as an orphan drug for the treatment of a specific

indication in the European Union before the application for marketing authorization is made. Orphan drugs in Europe
enjoy economic and marketing benefits, including up to 10 years of market exclusivity for the approved indication
unless another applicant can show that its product is safer, more effective, or otherwise clinically superior to the
orphan-designated product.

Reimbursement

Significant uncertainty exists regarding the coverage and reimbursement status of products approved by the

FDA and other government authorities. Sales of our products will depend, in part, on the availability of coverage and the
adequacy of reimbursement from third-party payors.

Within the U.S., third-party payors include government authorities or government healthcare programs, such as
Medicare and Medicaid (which provides prescription drug benefits to low income individuals), and private entities, such
as managed care organizations, private health insurers and other organizations. Third-party payors may limit coverage of
certain drug products or may manage utilization of a particular product (e.g., by requiring pre-approval (known as “prior
authorization”) for coverage of particular prescriptions (to allow the payor to assess medical necessity)). A third-party
payor's decision to provide coverage for a drug product does not mean that an adequate reimbursement rate will be
approved. Adequate third-party reimbursement may not be available to enable us to maintain net price levels sufficient
to realize an appropriate return on our investment in product development. Additionally, coverage and reimbursement
for drug products can differ significantly from payor to payor. One third-party payor’s decision to cover a particular drug
product or service does not ensure that other payors will also provide coverage for the medical product or service or will
provide coverage at an adequate reimbursement rate.

Third-party payors are increasingly challenging the price and examining the cost-effectiveness of new products

and services in addition to their safety and efficacy. To obtain or maintain coverage and reimbursement for any drug
product for which we obtain approval, we may need to collect real world evidence and conduct pharmacoeconomic
studies to demonstrate the medical necessity and cost-effectiveness of our product. These studies will be in addition to
the studies required to obtain or maintain regulatory approvals. If third-party payors do not consider a product to be cost-
effective compared to other available therapies, they may not cover the product or, if they do, the level of payment may
not be sufficient to allow sale of a product at a profit. Thus, obtaining and maintaining reimbursement status is complex
and costly.

Within the U.S., for any approved products, we may be required to provide discounts or rebates under

government healthcare programs or to certain government and private purchasers in order to obtain coverage under
federal healthcare programs such as Medicare and Medicaid or to sell products to government purchasers.

In the U.S., there have been ongoing efforts by federal and state governments to reform delivery of, or payment

for, health care, which include initiatives to reduce the cost of healthcare and drugs specifically. See “Risks Related to
Government Regulation - Unfavorable pricing regulations, third-party reimbursement practices, or healthcare reform
initiatives applicable to our product candidates could limit our potential product revenue.” Healthcare reform efforts or
any future legislation or regulatory actions aimed at controlling and reducing healthcare costs, including through
measures designed to limit reimbursement, restrict access, or impose unfavorable pricing modifications on

pharmaceutical products, could impact our ability to obtain or maintain coverage and adequate reimbursement for our
product candidates, if approved, which could materially harm our business and financial results.

In addition, in some foreign countries, the proposed pricing for a drug must be approved before it may be

lawfully marketed. The requirements governing drug pricing vary widely from country to country. For example, the
European Union provides options for its member states to restrict the range of medicinal products for which their
national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.
A member state may approve a specific price for the medicinal product, or it may instead adopt a system of direct or
indirect controls on the profitability of the company placing the medicinal product on the market. There can be no
assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow
favorable reimbursement and pricing arrangements for any of our products. Historically, products launched in the
European Union do not follow price structures of the U.S. and generally tend to be significantly lower.

Manufacturing

We contract with third-party contract manufacturers (CMOs) for the manufacture of our product candidates for

both our clinical and potential commercial needs. Our CMO network manufactures antibody, linker, and payload, and
conjugates the foregoing to create bulk drug substance of our product candidates and processes the bulk drug substance
into vialed and labeled drug product for use in humans. Although we are reliant on third parties to manufacture our
product candidates, we have personnel with extensive manufacturing experience to oversee the relationships with our
CMOs.

CMOs are subject to extensive governmental regulations, and we depend on them to manufacture our product

candidates in accordance with cGMP. We have an established quality assurance program designed to ensure that the
CMOs involved in the manufacture of product candidates do so in accordance with cGMP and other applicable U.S. and
foreign regulations. We believe that our current CMO network complies with such regulations.

Information about our Executive Officers

ImmunoGen’s executive officers are appointed by the Board of Directors at the first meeting of the Board

following the annual meeting of shareholders or at other Board meetings as appropriate and hold office until the first
Board meeting following the next annual meeting of shareholders and until a successor is chosen, subject to prior death,
resignation, or removal. Information regarding our executive officers is presented below. Ages are as of December 31,
2021.

Mark J. Enyedy, age 58, joined ImmunoGen in 2016, and has served as our President and Chief Executive

Officer since that time. Prior to joining ImmunoGen, he served in various executive capacities at Shire PLC, a
pharmaceutical company, from 2013 to 2016, including as Executive Vice President and Head of Corporate
Development from 2014 to 2016, where he led Shire’s strategy, M&A, and corporate planning functions and provided
commercial oversight of Shire’s pre-Phase 3 portfolio. Prior to joining Shire, he served as Chief Executive Officer and a
director of Proteostasis Therapeutics, Inc., a biopharmaceutical company, from 2011 to 2013. Prior to joining
Proteostasis, he served for 15 years at Genzyme Corporation, a biopharmaceutical company, most recently as President
of the Transplant, Oncology, and Multiple Sclerosis divisions. Mr. Enyedy holds a JD from Harvard Law School and
practiced law prior to joining Genzyme. Mr. Enyedy is also a director of LogicBio Therapeutics, Inc., Ergomed PLC, the
Biotechnology Innovation Organization (BIO), and The American Cancer Society of Eastern New England. Within the
past five years, he also served as a director of Akebia Therapeutics, Inc., Fate Therapeutics, Inc., and Keryx
Biopharmaceuticals, Inc.

Susan Altschuller, PhD, age 40, joined ImmunoGen in July 2020, and has served as our Senior Vice President

and Chief Financial Officer since that time. Dr. Altschuller joined ImmunoGen from Alexion Pharmaceuticals, where
she served as Head of Investor Relations, and later, Head of Enterprise Finance. Prior to joining Alexion, Dr. Altschuller
was Head of Investor Relations at Bioverativ, where she served as the primary interface with Wall Street and led all
investor-related activities for the launch of the Biogen spin-off in 2017. Early in her career, Dr. Altschuller held
positions at Biogen in various functions of increasing responsibility, including investor relations, corporate finance, and
commercial finance. Dr. Altschuller holds a PhD in Biomedical Engineering from the Illinois Institute of Technology
and an MBA from the MIT Sloan School of Management. Dr. Altschuller also serves as a director of Vestaron
Corporation.

Anna Berkenblit, MD, age 52, joined ImmunoGen in 2015, and has served as our Senior Vice President and

Chief Medical Officer since 2019. Prior to that, she served as our Vice President and Chief Medical Officer from 2015 to
2019. Prior to joining ImmunoGen, she served as Senior Vice President and Head of Clinical Research at H3
Biomedicine Inc., a pharmaceutical company, from 2013 to 2015. Dr. Berkenblit holds a Doctor of Medicine degree

from Harvard Medical School and a master’s degree from the Harvard/MIT Health & Sciences clinical investigator
training program. Dr. Berkenblit is also a director of Surrozen, Inc.

Stacy Coen, age 51, joined ImmunoGen in June 2020, and has served as our Senior Vice President and Chief
Business Officer since that time. Ms. Coen joined ImmunoGen from Editas Medicine, a biopharmaceutical company,
where she served as Vice President of Business Development, from 2017 to 2020. Prior to that, she spent twenty years in
roles of increasing responsibility in the area of business development at Sanofi Genzyme, a pharmaceutical company,
from 1997 to 2017. Ms. Coen holds an MBA, Business Management, Finance, and Healthcare, from the University of
Virginia, Darden Graduate School of Business Administration. Ms. Coen currently serves as a member of the board of
directors of FibroBiologics and as a member of the Board of Trustees of the Huntington’s Disease Society of America.

Kristen Harrington-Smith, age 49, joined ImmunoGen in November 2021, and has served as our Senior Vice

President and Chief Commercial Officer since that time. Ms. Harrington-Smith joined ImmunoGen from Novartis
Pharmaceuticals, a pharmaceutical company, where she served as Vice President and US Commercial Head of
Hematology from 2020 to 2021. In this role, she led the commercial teams responsible for a broad portfolio of therapies
in both benign and malignant hematologic diseases. In her previous role at Novartis, Ms. Harrington-Smith was the Vice
President and US Commercial Head of CAR-T from 2016 to 2020, launching KYMRIAH®, the first chimeric antigen
receptor (CAR) T-cell therapy, building management, sales, marketing, and market access teams. Ms. Harrington-Smith
received a BA from Williams College and an MBA from the Kenan-Flagler Business School at the University of North
Carolina. Ms. Harrington-Smith also serves as a member of the board of directors of eFFECTOR Therapeutics.

Theresa G. Wingrove, PhD, age 64, joined ImmunoGen in 2011, and has served as our Senior Vice President,

Regulatory Affairs and Quality since 2018. Prior to that she served as our Vice President, Regulatory Affairs and Quality
from 2017 to 2018, and prior to that as our Vice President, Regulatory Affairs for more than five years. Dr. Wingrove
holds a PhD in biochemical toxicology from the University of Rochester School of Medicine and Dentistry and
completed her postdoctoral work at the University of Rochester Medical Center.

Human Capital Resources

As of December 31, 2021, we had 106 full-time employees, of whom 75 were engaged in research and

development activities. Of the 75 research and development employees, 56 employees hold post-graduate degrees, of
which 20 hold Ph.D. degrees and 4 hold M.D. degrees. We consider our relations with our employees to be good. None
of our employees is covered by a collective bargaining agreement. We have entered into confidentiality agreements with
all of our employees, members of our board of directors, and consultants. Further, we have entered into assignment of
invention agreements with all of our employees.

Our key human capital management objectives are to attract, retain, and develop the highest quality talent. To
support these objectives, our human resources programs are designed to acquire talent to create a high-performing and
diverse workforce; develop employees to prepare them for critical roles and leadership positions for the future; reward
and support employees through competitive pay and benefits; and enhance our culture through efforts aimed at making
the workplace more engaging and inclusive. At ImmunoGen, prejudice, racism, and intolerance are unacceptable. We
are committed to diversity, equity, and inclusion across all aspects of our organization, including in our hiring,
promotion, and development practices.

Corporate Information

We were organized as a Massachusetts corporation in March 1981. Our principal offices are located at
830 Winter Street, Waltham, Massachusetts 02451, and our telephone number is (781) 895-0600. Our internet address
is www.immunogen.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on
Form 8-K, and all amendments to those reports, are available to you free of charge through the “Investors & Media –
Financials & Filings - SEC Filings” section of our website as soon as reasonably practicable after those materials have
been electronically filed with, or furnished to, the Securities and Exchange Commission. Please note that the information
contained on the web site is not a part of this annual report on Form 10-K.

Item 1A. Risk Factors

INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. BEFORE DECIDING WHETHER
TO INVEST IN OUR COMMON STOCK, YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW,
TOGETHER WITH THE OTHER INFORMATION CONTAINED IN THIS ANNUAL REPORT ON FORM 10-K,
INCLUDING OUR CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES. THE RISKS AND
UNCERTAINTIES DESCRIBED BELOW ARE THOSE THAT WE CURRENTLY BELIEVE MAY MATERIALLY
AFFECT OUR COMPANY AND IF ANY OF THESE RISKS ACTUALLY OCCURS, OUR BUSINESS, FINANCIAL
CONDITION, RESULTS OF OPERATIONS, OR CASH FLOW COULD BE SERIOUSLY HARMED. ADDITIONAL
RISKS AND UNCERTAINTIES THAT WE ARE UNAWARE OF OR THAT WE CURRENTLY DEEM IMMATERIAL
ALSO MAY BECOME IMPORTANT FACTORS THAT AFFECT OUR COMPANY AND MAY MATERIALLY IMPAIR
OUR BUSINESS.

Risks Related to our Financial Condition

We have a history of operating losses, expect to incur significant additional operating losses, and may never be
profitable.

We have generated operating losses since our inception. As of December 31, 2021, we had an accumulated

deficit of $1.5 billion. We may never be profitable. We expect to incur substantial additional operating losses for at least
the near term as our development, preclinical testing, and clinical trials continue. We intend to continue to invest
significantly in our product candidates. We may encounter technological or regulatory difficulties as part of this
development and commercialization process that we cannot overcome or remedy. Our revenues to date have been
primarily from upfront and milestone payments, research and development support, clinical materials reimbursement
from our collaborators, and from royalties received from the commercial sales of KADCYLA (which we sold partial
cash rights to in 2015 and the remainder in 2019). We have not generated any revenue from product sales. Because of
the numerous risks and uncertainties associated with developing pharmaceutical drugs, we are unable to predict the
extent of any future losses or when we will become profitable, if at all. In addition, our expenses could increase beyond
expectations if we are required by the FDA, or foreign regulatory agencies, to perform studies and clinical trials in
addition to those that we currently anticipate, or if there are any delays in our or our partners completing clinical trials or
the development of any of our product candidates. We may never generate revenues from the commercial sale of internal
products. Even if we do successfully develop products that can be marketed and sold commercially, we will need to
generate significant revenues from those products to achieve and maintain profitability. Even if we do become
profitable, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become
and remain profitable would decrease the value of the company and could impair our ability to raise capital, maintain our
development efforts, expand our business, or continue our operations and may require us to raise additional capital that
would dilute your ownership interest. A decline in the value of our company could also cause you to lose all or part of
your investment.

If we are unable to obtain additional funding when needed, we may have to delay or scale back some of our
programs or grant rights to third parties to develop and market our product candidates.

We will continue to expend substantial resources developing and commercializing new and existing product

candidates, including costs associated with research and development, acquiring new technologies, conducting
preclinical studies and clinical trials, obtaining regulatory approvals, manufacturing products, establishing marketing and
sales capabilities to commercialize our product candidates, as well as providing certain support to our collaborators in
the development of their products. We believe that our current cash and cash equivalents will be sufficient to meet our
current and projected operating and capital requirements for at least the next 12 months. Conducting preclinical studies
and clinical trials is a time-consuming, expensive, and uncertain process that can take years to complete, and we may
never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition,
our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be
derived from sales of products that may not be commercially available for several years, if ever. Accordingly, we may
need to continue to rely on additional financing to achieve our business objectives.

In addition, we cannot provide assurance that anticipated collaborator payments will, in fact, be received.
Should such future collaborator payments not be received, we expect we could seek additional funding from other
sources. We may elect or need to seek additional financing sooner due to a number of other factors as well, including:

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if either we incur higher than expected costs or we or any of our collaborators experience slower than
expected progress in developing product candidates and obtaining regulatory approvals; and

acquisition of technologies and other business opportunities that require financial commitments.

Additional funding may not be available to us in sufficient amounts, on favorable terms, or at all. We may raise
additional funds through public or private financings, collaborative arrangements, or other arrangements. Any additional
fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability
to develop and commercialize our product candidates. Volatility in the financial markets has generally made equity and
debt financing more difficult to obtain and may have a material adverse effect on our ability to meet our fundraising
needs. Moreover, the terms of any financing may adversely affect the holdings or the rights of our shareholders and the
issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market
price of our shares to decline. Debt financing, if available, may involve covenants that could restrict our business
activities. If we are unable to raise additional funds through equity or debt financing when needed, we may be required
to delay, scale back, or eliminate expenditures for some of our development programs, including restructuring our
operations, refinancing or restructuring our debt, or grant rights to develop and market product candidates that we would
otherwise prefer to internally develop and market. If we are required to grant such rights, the ultimate value of these
product candidates to us may be reduced.

Our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable
income may be limited.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, a corporation that undergoes

an “ownership change,” is subject to limitations on its ability to use its pre-change net operating loss carryforwards
(NOLs), and other pre-change tax attributes (such as research tax credits) to offset its post-change income or taxes. For
these purposes, an ownership change generally occurs where the equity ownership of one or more shareholders or groups
of shareholders who own at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points
over its lowest ownership percentage within a three-year period. We may have experienced such ownership changes in
the past, and we may experience shifts in our stock ownership, some of which are outside ImmunoGen’s control. These
ownership changes may subject our existing NOLs or credits to substantial limitations under Sections 382 and 383.
Accordingly, we may not be able to utilize a material portion of our NOLs or credits. As of December 31, 2021, we had
federal NOLs of $471.6 million available to reduce federal taxable income, if any, that begin to expire in 2028 through
2037, and $536.6 million of federal NOLs that can be carried forward indefinitely. As of December 31, 2021, we also
had $77.9 million of federal credit carryforwards that expire beginning in 2023. Limitations on our ability to utilize those
NOLs to offset U.S. federal taxable income could potentially result in increased future tax liability to us. In addition, at
the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could
accelerate or permanently increase state taxes owed.

Risks Related to Our Business and Industry

A pandemic, epidemic, or outbreak of an infectious disease, such as the COVID-19 pandemic, may materially and
adversely affect our business and our financial results.

The spread of COVID-19 has affected the global economy, our operations, clinical trial activities, and supply
chain and may continue to do so. The current outbreak of COVID-19 has spread worldwide, including countries where
we are currently conducting our clinical trials, including our MIRASOL trial. The COVID-19 pandemic is still evolving,
and to date has led to the implementation of various responses, including government-imposed quarantines, travel
restrictions, and other public health safety measures, as well as reported adverse impacts on healthcare resources,
facilities, and providers across the United States, and in other countries worldwide. The continued impact of COVID-19
may result in a period of business disruption, including delays in our clinical trials or delays or disruptions in our supply
chain.

The continued impact of COVID-19 globally could adversely affect our clinical trial operations in the United
States and elsewhere, including our ability to recruit and retain patients, principal investigators, and site staff who, as
healthcare providers, may have heightened exposure to COVID-19. For example, COVID-19 slowed site activation and
patient enrollment for both SORAYA and MIRASOL, which resulted in a limited delay in patient accrual for each of
these studies. Even with the approval of vaccines for COVID-19, the pandemic may further delay enrollment in trials
due to prioritization of hospital resources toward the pandemic, restrictions on travel, and some patients may be
unwilling to enroll in our trials or be unable to comply with clinical trial protocols if quarantines or travel restrictions
impede patient movement or interrupt healthcare services, which would delay our ability to conduct clinical trials or
release clinical trial results. In addition, there could be a potential effect of COVID-19 to the business at FDA or other
health authorities, which could result in delays of reviews and approvals, including with respect to our product
candidates. COVID-19 may also affect employees of third-party contract research organizations located in affected
geographies that we rely upon to carry out our clinical trials. The continuation of the COVID-19 pandemic, including the
development of new variants of the virus, or the spread of another infectious disease, could also negatively affect the

operations at our third-party manufacturers, which could result in delays or disruptions in the supply of our product
candidates if we need additional materials. Additionally, interruption in the manufacture and/or global shipping affecting
the transport of clinical trial materials, such as patient samples, product candidates, and other supplies used in our
clinical trials may negatively affect our trials.

The trading prices for our common stock and other biotechnology companies have also been highly volatile as a

result of the COVID-19 pandemic. We, therefore, may face difficulties raising capital through sales of our common
stock or equity linked to our common stock, or such sales may be on unfavorable terms or unavailable.

We cannot presently predict the scope and severity of any additional potential business shutdowns or
disruptions as a result of the COVID-19 pandemic, including due to new variants of COVID-19. If we or any of the third
parties with whom we engage, however, were to experience further shutdowns or other business disruptions, our ability
to conduct our business in the manner and on the timelines presently planned could be materially and negatively
affected, which could have a material adverse impact on our business and our results of operation and financial
condition.

If our Antibody-Drug Conjugate technology does not produce safe, effective, and commercially viable products or
if such products fail to obtain or maintain FDA approval, our business will be severely harmed.

Our ADC technology yields novel product candidates for the treatment of cancer. To date, only one ADC using

our technology, KADCYLA, has obtained marketing approval. Our ADC product candidates and/or our collaborators’
ADC product candidates may not prove to be safe, effective, or commercially viable treatments for cancer and as a
result, our ADC technology may not result in any future meaningful benefits to us or for our current or potential
collaborators. Furthermore, we are aware of only a limited number of other compounds that are based on technology
similar to our ADC technology that have obtained marketing approval by the FDA. If our ADC technology fails to
generate product candidates that are safe, effective, and commercially viable treatments for cancer or such product
candidates fail to obtain or maintain FDA approval, our business will be severely harmed.

Clinical trials for our product candidates and those of our collaborators will be lengthy and expensive, and their
outcome is uncertain.

Before obtaining regulatory approval for the commercial sale of any product candidates, we and our

collaborators must demonstrate through clinical testing that our product candidates are safe and effective for use in
humans. Conducting clinical trials is a time-consuming, expensive, and uncertain process and typically requires years to
complete. In our industry, the results from preclinical studies and early clinical trials often are not predictive of results
obtained in later-stage clinical trials. Some compounds that have shown promising results in preclinical studies or early
clinical trials subsequently fail to establish sufficient safety and efficacy data necessary to obtain regulatory approval.
For example, despite encouraging results from earlier clinical trials of mirvetuximab, our FORWARD I Phase 3 clinical
trial evaluating mirvetuximab compared to chemotherapy in women with FR(cid:302)-positive, platinum-resistant ovarian
cancer, did not meet the primary endpoint in either the entire treatment population or the pre-specified high
FR(cid:302) expression population. Based on post hoc exploratory analyses of the FORWARD I results and consultations with
the FDA, we implemented two new trials of mirvetuximab, SORAYA and MIRASOL, to support the potential approval
of mirvetuximab as a monotherapy. We reported positive top-line data from our SORAYA trial, however, results from
our ongoing MIRASOL study may not show positive results consistent with our SORAYA trial, post hoc exploratory
analyses of the FORWARD I results, or earlier successful trials of mirvetuximab as monotherapy which would cause
significant harm to our business and future prospects.

Before we can commence clinical trials for a therapeutic candidate, we must conduct extensive preclinical
testing and studies and submit an IND to FDA. We cannot be sure that submission of an IND will result in the FDA
allowing our clinical trials to begin on the timelines we expect, if at all, as FDA may require additional preclinical,
toxicology, or other in vivo or in vitro data to support the IND. Additionally, at any time during the clinical trials, we,
our collaborators, or the FDA or other regulatory authority might delay or halt any clinical trials of our product
candidates for various reasons, including:

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occurrence of unacceptable toxicities or side effects;

ineffectiveness of the product candidate;

insufficient drug supply, including delays in obtaining supplies/materials necessary for manufacturing
such drugs;

negative or inconclusive results from the clinical trials, or results that necessitate additional nonclinical
studies or clinical trials;

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delays in obtaining or maintaining required approvals from institutions, review boards, or other
reviewing entities at clinical sites;

delays in patient enrollment;

insufficient funding or a reprioritization of financial or other resources;

our or our collaborators’ inability to develop and obtain approval for any companion in
vitro diagnostic devices that the FDA or other regulatory authority may conclude must be used with
such product candidates to ensure their safe use; or

other reasons that are internal to the businesses of our collaborators and third-party suppliers, which
they may not share with us.

Any failure or substantial delay in successfully completing clinical trials and obtaining regulatory approval for

our product candidates or our collaborators’ product candidates could severely harm our business.

Interim, top-line, or preliminary data from our clinical trials that we announce may change as more patient
data become available and are subject to audit and verification procedures that could result in material
changes in the final data.

From time to time, we have publicly disclosed, and in the future will disclose, preliminary or top-line data
from our preclinical studies and clinical trials, which are based on preliminary analyses of then- available data, and
the results and related findings and conclusions are subject to change following a more comprehensive review of the
data related to the particular study or trial. We also make assumptions, estimations, calculations, and conclusions as
part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all
data. Therefore, final results from the studies may differ from the top-line results initially reported, and the final
results may indicate different conclusions once additional data have been evaluated. As such, top-line data should
be viewed with caution until the final data are available.

From time to time, we may also disclose interim data from our preclinical studies and clinical trials.

Interim data from clinical trials that we may complete are subject to the risk that one or more of the outcomes may
materially change as patient enrollment continues and more data become available. Adverse differences between
top-line, preliminary, or interim data, on the one hand, and final data, on the other, could significantly harm our
business prospects. Further, disclosure of interim data by us or by our competitors could result in volatility in the
price of our common stock.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates,
calculations, conclusions, or analyses, or may interpret or weigh the importance of data differently, which could
negatively affect the approvability or commercialization of the particular product candidate.

In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based

on what is typically extensive information, and you or others may not agree with what we determine is material or
otherwise appropriate information to include in our disclosure. If the final results differ from the interim, top-line, or
preliminary data, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to
obtain approval for, and to commercialize, our product candidates may be harmed, which may negatively affect our
business, financial condition, results of operations, and prospects.

If our product candidates or those of our collaborators do not gain market acceptance, our business will suffer.

Even if clinical trials demonstrate the safety and efficacy of our product candidates, including mirvetuximab,

and those of our collaborators, and the necessary regulatory approvals are obtained, our and our collaborators’ products
may not gain market acceptance among physicians, patients, healthcare payers, and other members of the medical
community. The degree of market acceptance of any products that we or our collaborators develop will depend on a
number of factors, including:

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their level of clinical efficacy and safety;

their advantage over alternative treatment methods;

our/the marketer’s and our collaborators’ ability to gain acceptable reimbursement and the
reimbursement policies of government and other third-party payers; and

the quality of the distribution capabilities of the party(ies) responsible to market and distribute the
product(s).

Physicians may not prescribe any of our future products until such time as clinical data or other factors
demonstrate the safety and efficacy of those products as compared to conventional drugs and other treatments. Even if
the clinical safety and efficacy of our products are established, physicians may elect not to recommend the therapies for
any number of other reasons, including whether the physicians are already using competing products that satisfy their
treatment objectives. If our products do not achieve significant market acceptance and use, we will not be able to recover
the significant investment we have made in developing such products and our business will be severely harmed.

We currently do not have the direct sales, marketing, or distribution capabilities necessary to successfully
commercialize our products on a large scale and may be unable to establish such capabilities.

We currently intend to commercialize mirvetuximab ourselves in the United States and the European Union.
We may choose to rely on third parties to market and sell mirvetuximab outside of the United States and the European
Union, either through distributor or outlicensing arrangements. For example, in October 2020, we entered into a
collaboration and license agreement with Huadong under which Huadong will exclusively develop and commercialize
mirvetuximab in Greater China. We retain all rights to mirvetuximab in the rest of the world. At this time, we do not
have any significant direct sales, marketing, or distribution capabilities. In addition, arrangements with third parties to
develop and commercialize mirvetuximab or other future potential products could significantly limit the revenues we
derive from these compounds, and these third parties, including Huadong, may fail to commercialize our compounds
successfully.

We face product liability risks and may not be able to obtain adequate insurance.

The use of our product candidates during testing or after approval entails an inherent risk of adverse effects,

which could expose us to product liability claims. Regardless of their merit or eventual outcome, product liability claims
may result in:

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decreased demand for our product;

injury to our reputation and significant negative media attention;

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costs of litigation;

distraction of management; and

substantial monetary awards to plaintiffs.

We may not have sufficient resources to satisfy any liability resulting from these claims. While we currently
have product liability insurance for products that are in clinical testing, our coverage may not be adequate in scope to
protect us in the event of a successful product liability claim. Further, we may not be able to maintain our current
insurance, increase our insurance coverage as may be needed, or obtain general product liability insurance on reasonable
terms and at an acceptable cost if we or our collaborators begin commercial production of our proposed product
candidates, including mirvetuximab. This insurance, even if we can obtain and maintain it, may not be sufficient to
provide us with adequate coverage against potential liabilities. If we are unable to maintain sufficient insurance coverage
at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the
development and commercial production and sale of our proposed product candidates, which could severely harm our
business.

We may be unable to compete successfully.

The markets in which we compete are well-established and intensely competitive. We may be unable to
compete successfully against our current and future competitors. Our failure to compete successfully may result in lower
volume sold, pricing reductions, reduced gross margins, and failure to achieve market acceptance for our potential
products, including mirvetuximab. Our competitors include research institutions, pharmaceutical companies, and
biotechnology companies, such as Pfizer, Seattle Genetics, Roche, Astellas, AstraZeneca, Daiichi Sankyo,
GlaxoSmithKline, AbbVie, and the Menarini Group. For example, pivekimab is in development for the treatment of
BPDCN and, if approved, would compete with the Menarini Group’s ELZONRIS® (tagraxofusp), which is approved by
the U.S. FDA for sale in the United States and by the EMA for sale in the European Union for the treatment of BPDCN.
Many of our competitors have substantially more experience and more capital, research and development, regulatory,
manufacturing, human, and other resources than we do. As a result, they may:

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develop products that are safer or more effective than our product candidates;

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obtain FDA and other regulatory approvals or reach the market with their products more rapidly than
we can, reducing the potential sales of our product candidates;

devote greater resources to market or sell their products;

adapt more quickly to new technologies and scientific advances;

initiate or withstand substantial price competition more successfully than we can;

have greater success in recruiting skilled scientific workers from the limited pool of available talent;

(cid:131) more effectively negotiate third-party licensing and collaboration arrangements; and

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take advantage of acquisitions or other opportunities more readily than we can.

A number of pharmaceutical and biotechnology companies are currently developing products targeting the
same types of cancer that we target, and some of our competitors’ products have entered clinical trials or already are
commercially available.

Our product candidates, including mirvetuximab, if approved and commercialized, will also compete against

well-established, existing therapeutic products that are currently reimbursed by government healthcare programs, private
health insurers, and health maintenance organizations. In addition, if our product candidates are approved and
commercialized, we may face competition from biosimilars. The ACA, which included the BPCIA, amended the Public
Health Service Act to create an abbreviated approval pathway for two types of “generic” biologics—biosimilars and
interchangeable biologic products. The BPCIA establishes a pathway for the FDA approval of follow-on biologics and
provides twelve years data exclusivity for reference products and an additional six-month exclusivity period if pediatric
studies are conducted. In Europe, the EMA has issued guidelines for approving products through an abbreviated
pathway, and biosimilars have been approved in Europe. If a biosimilar version of one of our potential products were
approved in the United States or Europe, it could have a negative effect on sales and gross profits of the potential
product and our financial condition.

We face and will continue to face intense competition from other companies for collaborative arrangements
with pharmaceutical and biotechnology companies, for relationships with academic and research institutions, and for
licenses to proprietary technology. In addition, we anticipate that we will face increased competition in the future as new
companies enter our markets and as scientific developments surrounding antibody-based therapeutics for cancer continue
to accelerate. While we will seek to expand our technological capabilities to remain competitive, research and
development by others may render our technology or product candidates obsolete or noncompetitive or result in
treatments or cures superior to any therapy developed by us.

We have a limited number of authorized and unreserved shares available for future issuance, which may impair
our ability to conduct future financings and other transactions.

Our restated articles of organization, as amended, currently authorizes us to issue up to 300,000,000 shares of
common stock and 5,000,000 shares of preferred stock. Following the closing of our December 2021 public offering of
common stock, we have a limited number of authorized shares of common stock available for future issuance that are
not already issued or reserved for issuance.

If we are unable to enter into new arrangements to issue shares of our common stock or securities convertible or

exercisable into shares of our common stock because we do not have a sufficient number of authorized, unissued, and
unreserved shares of common stock, our ability to complete equity-based financings or other transactions that involve
the potential issuance of our common stock or securities convertible or exercisable into our common stock, will be
limited. In lieu of issuing common stock or securities convertible into our common stock in any future equity financing
transactions, we may need to issue some or all of our authorized but unissued shares of preferred stock, which would
likely have superior rights, preferences, and privileges to those of our common stock, or we may need to issue debt that
is not convertible into shares of our common stock, which may require us to grant security interests in our assets and
property and/or impose covenants upon us that restrict our business. If we are unable to issue additional shares of
common stock or securities convertible or exercisable into our common stock, our ability to enter into strategic
transactions such as acquisitions of companies or technologies, may also be limited. If we propose to amend our restated
articles of organization, as amended, to increase our authorized shares of common stock, such a proposal would require
the approval by the holders of a majority of the shares of our common stock outstanding and entitled to vote, and we
cannot assure you that such a proposal would be adopted. If we are unable to complete financing, strategic, or other
transactions due to our inability to issue additional shares of common stock or securities convertible or exercisable into
our common stock, our financial condition and business prospects may be materially harmed.

Risks Related to Our Dependence on Third Parties

If our collaborators fail to perform their obligations under our agreements with them or determine not to
continue with clinical trials for particular product candidates, our business could be severely affected.

The development and commercialization of our product candidates depends, in part, upon the formation and

maintenance of collaborative arrangements. Collaborations provide an opportunity for us to:

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generate cash flow and revenue;

fund some of the costs associated with our internal research and development, preclinical testing,
clinical trials, and manufacturing;

seek and obtain regulatory approvals faster than we could on our own;

successfully commercialize existing and future product candidates; and

secure access to targets which, due to intellectual property restrictions, would otherwise be unavailable
to our technology.

If we fail to secure or maintain successful collaborative arrangements, the development and marketing of

compounds that use our technology may be delayed, scaled back, or otherwise may not occur. In addition, we may be
unable to negotiate other collaborative arrangements or, if necessary, modify our existing arrangements on acceptable
terms. We cannot control the amount and timing of resources our collaborators may devote to our product candidates.
Our collaborators may separately pursue competing product candidates, therapeutic approaches, or technologies to
develop treatments for the diseases targeted by us or our collaborative efforts, or may decide, for reasons that may not be
known to us or with which we may disagree, to discontinue development of product candidates under our agreements
with them. Any of our collaborators may slow or discontinue the development of a product candidate covered by a
collaborative arrangement for reasons that include, but are not limited to:

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a change in the collaborative partner’s strategic focus as a result of merger, management changes,
adverse business events, or other causes;

a change in the priority of the product candidate relative to other programs in the collaborator’s
pipeline;

a reassessment of the patent situation related to the compound or its target;

a change in the anticipated competition for the product candidate;

preclinical studies and clinical trial results; and

a reduction in the financial resources the collaborator can or is willing to apply to the development of
new compounds.

Even if our collaborators continue their collaborative arrangements with us, they may nevertheless determine

not to actively pursue the development or commercialization of any resulting products. Also, our collaborators may fail
to perform their obligations under the collaborative agreements or may be slow in performing their obligations. Our
collaborators can terminate our collaborative agreements under certain conditions. The decision to advance a product
that is covered by a collaborative agreement through clinical trials and ultimately to commercialization is, in some cases,
at the discretion of our collaborators. If any collaborative partner were to terminate or breach our agreements, fail to
complete its obligations to us in a timely manner, or decide to discontinue its development of a product candidate, our
anticipated revenue from the agreement and the development and commercialization of the products could be severely
limited or eliminated. If we are not able to establish additional collaborations or any or all of our existing collaborations
are terminated and we are not able to enter into alternative collaborations on acceptable terms, or at all, our continued
development, manufacture, and commercialization of our product candidates could be delayed or scaled back as we may
not have the funds or capability to continue these activities. If our collaborators fail to successfully develop and
commercialize ADC compounds, our business prospects could be severely harmed.

If our product requirements for clinical trials or commercialization are significantly higher than we estimated,
the inability to procure additional antibody production, conjugation, or fill/finish services in a timely manner
could impair our ability to initiate or advance our clinical trials or commercialization of mirvetuximab or any
other product candidates.

We rely on third-party suppliers to manufacture antibodies used in our own proprietary compounds. Due to the

specific nature of the antibody and availability of production capacity, there is significant lead time required by these
suppliers to provide us with the needed materials. If our antibody requirements for clinical or commercial materials to be
manufactured are significantly higher than we estimated, we may not be able to readily procure additional antibody
which would impair our ability to advance our clinical trials currently in process or initiate additional trials or
commercialize mirvetuximab or any other product candidates. We also rely on third parties to manufacture bulk drug
substance and convert it into filled and finished vials of drug product for clinical use. If our product requirements are
significantly higher than we estimated, we may not be able to readily procure slots to manufacture bulk drug substance
or to convert drug substance into filled and finished vials of drug product for clinical or commercial use. There can be no
assurance that we will not have supply problems that could delay or stop our clinical trials, hinder our commercialization
efforts, or otherwise could have a material adverse effect on our business.

We are currently contractually required to obtain all of the DM4 used in mirvetuximab from a single third-party
manufacturer, and any delay or interruption in such manufacturer’s operations could impair our ability to
advance preclinical and clinical trials and commercialization of our product candidates and our collaborators’
products candidates.

We rely on a sole third-party supplier, Società Italiana Corticosteroidi S.r.l, to manufacture the DM4 used in
mirvetuximab. Any delay or interruption in the operations of our sole third-party supplier and/or our supply of DM4
could lead to a delay or interruption in our manufacturing operations, preclinical studies, clinical trials, and
commercialization of our product candidates and our collaborators’ product candidates, which could negatively affect
our business.

We currently rely on, and expect to continue to rely on, third-party manufacturers to produce our antibodies,
linkers, payloads, drug substance, and drug product, and any delay or interruption in such manufacturers’
operations could impair our ability to advance clinical trials and commercialization of our product candidates.

We rely on third-party contract manufacturers to produce sufficiently large quantities of drug materials that are
and will be needed for clinical trials and commercialization of our potential products. We have established relationships
with third-party manufacturers to provide materials for our clinical trials and are developing relationships with these and
other third-party manufacturers that we believe will be necessary to continue the development of our product candidates
and to supply commercial quantities of these product candidates if they are approved. Third-party manufacturers may not
be able to meet our needs with respect to timing, quantity, or quality of materials. If we are unable to contract for a
sufficient supply of needed materials on acceptable terms, or if we should encounter delays or difficulties in our
relationships with manufacturers, our clinical trials may be delayed, thereby delaying the submission of applications for
regulatory approval and the market introduction and subsequent commercialization of our potential products. Any such
delays may lower our revenues and potential profitability.

The facilities used to manufacture our product candidates (drug substance and drug product) must be inspected

by the FDA (and other similar regulatory agencies outside the United States depending on where marketing
authorizations are filed) before marketing authorizations are approved. Often, but not always, these inspections are
triggered by marketing authorization submissions. In the United States, if we want to change manufacturers or add
additional manufacturers after our product candidate is approved, the FDA must approve a supplemental BLA. We are
completely dependent on our contract manufacturers for compliance with cGMPs in connection with the manufacture of
our product candidates. If our contract manufacturers cannot successfully manufacture material that conforms to our
specifications and the regulatory requirements of the FDA or others, we will not be able to use the products produced at
their manufacturing facilities. In addition, we have no control over the ability of our contract manufacturers to maintain
adequate quality control, quality assurance, and qualified personnel. If the FDA or a comparable foreign regulatory
authority finds that these facilities do not comply with cGMP, we may need to find alternative manufacturing facilities,
which would significantly impact our ability to develop, obtain marketing approval for, or market our product
candidates, if approved. Further, our failure, or the failure of our third-party manufacturers, to comply with these or other
applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil
penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or
drugs, if approved, operating restrictions and criminal prosecutions, any of which could significantly and adversely
affect our business and supplies of our product candidates.

We depend on a small number of collaborators for a substantial portion of our revenue. The loss of, or a material
reduction in activity by, any one of these collaborators could result in a substantial decline in our revenue.

We have and will continue to have collaborations with a limited number of companies. As a result, our financial

performance depends, in part, on the efforts and overall success of these companies. Also, the failure of any one of our

collaborators to perform its obligations under its agreement with us, including making any royalty, milestone, or other
payments to us, could have an adverse effect on our financial condition. Further, any material reduction by any one of
our collaborators in its level of commitment of resources, funding, personnel, and interest in continued development
under its agreement with us could have an adverse effect on our financial condition. If a present or future collaborator of
ours were to be involved in a business combination, the collaborator’s continued pursuit and emphasis on our product
development program could be delayed, diminished, or terminated.

We depend on our collaborators for the determination of royalty payments. We may not be able to detect errors,
and payment calculations may call for retroactive adjustments.

The royalty payments we may receive are determined by our collaborators based on their reported net sales.

Each collaborative partner’s calculation of the royalty payments is subject to and dependent upon the adequacy and
accuracy of its sales and accounting functions, and errors may occur from time to time in the calculations made by a
collaborative partner. Our agreement with Genentech provides us the right to audit the calculations and sales data for the
associated royalty payments related to sales of KADCYLA; however, such audits may occur many months following our
recognition of the royalty revenue, may require us to adjust our royalty revenues in later periods and generally require
audit-related costs on our part.

Royalty rates under our license agreements with our collaborators may vary over the royalty term depending on
our intellectual property rights and the existence of certain third-party competing products.

Most of our license agreements with our collaborators provide that the royalty rates are subject to downward
adjustment in the absence of ImmunoGen patent rights covering various aspects of the manufacture, use, or sale of the
products developed under such licenses, or if certain third-party products compete with the particular product covered by
the license agreement.

Risks Related to Our Intellectual Property

If we are unable to protect our intellectual property rights adequately, the value of our technology and our
product candidates could be diminished.

Our success depends in part on obtaining, maintaining, and enforcing our patents and other proprietary rights
and our ability to avoid infringing the proprietary rights of others. We seek to protect our proprietary position by filing
patent applications in the United States and in foreign countries that cover our novel product candidates and their uses,
pharmaceutical formulations and dosages, and processes for the manufacture of them. Our patent portfolio currently
includes both patents and patent applications. Patent law relating to the scope of claims in the biotechnology field in
which we operate is still evolving, is surrounded by a great deal of uncertainty, and involves complex legal, scientific,
and factual questions. To date, no consistent policy has emerged regarding the breadth of claims allowed in
biotechnology patents. Accordingly, our pending patent applications may not result in issued patents or in patent claims
as broad as in the original applications. Although we own numerous patents, the issuance of a patent is not conclusive as
to its validity or enforceability. Through litigation, a third party may challenge the validity or enforceability of a patent
after its issuance. In addition, the patent prosecution process is expensive and time-consuming. We may not be able to
file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We may
choose not to seek patent protection for certain innovations and may choose not to pursue patent protection in certain
jurisdictions. Under the laws of certain jurisdictions, patents or other intellectual property rights may be unavailable or
limited in scope. It is also possible that we will fail to identify patentable aspects of our research and development before
it is too late to obtain patent protection.

Patents and patent applications owned or licensed by us may become the subject of inter partes review, post-

grant review, ex parte reexamination, interference, opposition, nullity, or other proceedings in a court or patent office in
the United States or in a foreign jurisdiction to determine validity, enforceability, or priority of invention, which could
result in substantial cost to us. An adverse decision in such a proceeding may result in our loss of rights under a patent or
patent application. It is unclear how much protection, if any, will result from our patents if we attempt to enforce them or
if they are challenged in court or in other proceedings. A competitor may successfully invalidate our patents, or a
challenge could result in limitations of the patents’ coverage. The courts continue to interpret various aspects of patent-
related laws and related agency rules in ways that we cannot predict, potentially making it easier for competitors and
other interested parties to challenge our patents, which, if successful, could have a material adverse effect on our
business and prospects. In addition, the cost of litigation or patent office proceedings to uphold the validity of patents
can be substantial. If we are unsuccessful in these proceedings, third parties may be able to use our patented technology
and may be able to do so without paying us licensing fees or royalties. Moreover, competitors may infringe our patents
or successfully avoid them through design innovation. To prevent infringement or unauthorized use, we may need to file

infringement claims, which are expensive and time-consuming. In an infringement proceeding, a court may decide that a
patent of ours is not valid. Even if the validity of our patents were upheld, a court may refuse to stop the other party from
using the technology at issue on the ground that its activities are not covered by our patents or that the facts surrounding
the other party’s use of our technology do not satisfy the legal requirements to grant such an injunction.

Policing unauthorized use of our intellectual property is difficult, and we may not be able to prevent

misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as
in the United States.

In addition to our patent rights, we also rely on unpatented technology, trade secrets, know-how, and
confidential information. Third parties may independently develop substantially equivalent information and techniques
or otherwise gain access to or disclose our technology. We may not be able to effectively protect our rights in unpatented
technology, trade secrets, know-how, and confidential information. We require each of our employees, consultants, and
corporate partners to execute a confidentiality agreement at the commencement of an employment, consulting, or
collaborative relationship with us. Further, we require that all employees enter into assignment of invention agreements
as a condition of employment. However, these agreements may not provide effective protection of our information, or, in
the event of unauthorized use or disclosure, they may not provide adequate remedies. If we are unable to prevent
material disclosure of the trade secrets and other intellectual property related to our technologies to third parties, we may
not be able to establish or maintain the competitive advantage that we believe is provided by such intellectual property,
adversely affecting our market position and business and operational results.

We may incur substantial costs as a result of litigation or other proceedings relating to patent and other
intellectual property rights held by third parties and we may be unable to protect our rights to, or to
commercialize, our product candidates.

Patent litigation is very common in the biotechnology and pharmaceutical industries. Third parties may assert
patent or other intellectual property infringement claims against us with respect to our technologies, products, or other
matters. From time to time, we have received correspondence from third parties alleging that, or inquiring whether, we
infringe their intellectual property rights. Any claims that might be brought against us alleging infringement of patents
may cause us to incur significant expenses and, if successfully asserted against us, may cause us to pay substantial
damages and limit our ability to use the intellectual property subject to these claims. Even if we were to prevail, any
litigation would be costly and time-consuming and could divert the attention of our management and key personnel from
our business operations. Furthermore, as a result of a patent infringement suit, we may be forced to stop or delay
developing, manufacturing, or selling potential products that incorporate the challenged intellectual property unless we
enter into royalty or license agreements. There may be third-party patents, patent applications, and other intellectual
property relevant to our potential products that may block or compete with our products or processes of which we are
currently unaware with claims that cover the use or manufacture of our drug candidates or the practice of our related
methods. Because patent applications can take many years to issue, there may be currently pending patent applications
that may later result in issued patents that our drug candidates may infringe. In addition, we sometimes undertake
research and development with respect to potential products even when we are aware of third-party patents that may be
relevant to our potential products, on the basis that such patents may be challenged or licensed by us or that the Safe
Harbor under 35 U.S.C. 271(e) applies. If our subsequent challenge to such patents were not to prevail, we may not be
able to commercialize our potential products after having already incurred significant expenditures unless we are able to
license the intellectual property on commercially reasonable terms. We may not be able to obtain such license
agreements on terms acceptable to us, if at all. Even if we were able to obtain licenses to such technology, some licenses
may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. Ultimately, we
may be unable to commercialize some of our potential products or may have to cease some of our business operations,
which could severely harm our business.

Any inability to license proprietary technologies or processes from third parties that we use in connection with
the development and manufacture of our product candidates may impair our business.

Other companies, universities, and research institutions have or may obtain patents that could limit our ability

to use, manufacture, market, or sell our product candidates or impair our competitive position. As a result, we would
have to obtain licenses from other parties before we could continue using, manufacturing, marketing, or selling our
potential products. Any necessary licenses may not be available on commercially acceptable terms, if at all. If we do not
obtain the required licenses, we may not be able to market our potential products at all or we may encounter significant
delays in product development while we redesign products or methods that are found to infringe the patents held by
others.

Risks Related to Government Regulation

We expect to file for approval for mirvetuximab from the FDA through the use of accelerated approval
pathways. If unable to obtain approval under an accelerated pathway, we may be required to conduct
additional preclinical studies or clinical trials beyond those that we currently contemplate, which could
increase the expense of obtaining, and delay the receipt of, necessary marketing approvals. Even if we
receive accelerated approval from the FDA, if our confirmatory trials do not verify clinical benefit, or if we
do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw accelerated
approval.

We are seeking approval for mirvetuximab for the treatment of FR(cid:302)-high platinum-resistant epithelial

ovarian, primary peritoneal, or fallopian tube cancer with one to three prior lines of therapy under the accelerated
approval pathway.

The FDA may not accept our application for accelerated approval, may not grant such approval on a

timely basis, or may not grant approval at all. The FDA or foreign regulatory authorities may determine that results
from the SORAYA trial do not demonstrate an improvement over available therapies or address an unmet need or
may otherwise find that our application does not meet the conditions for accelerated approval, including due to
insufficient duration or response or unacceptable toxicities, and could require us to conduct further studies prior to
considering our application or granting approval of any type. We might not be able to fulfill the FDA’s requirements
in a timely manner, which would cause delays, or approval might not be granted because our submission is deemed
incomplete by the FDA. A failure to obtain accelerated approval or any other form of expedited development,
review, or approval for mirvetuximab would result in a longer time period to commercialization of mirvetuximab,
would increase the cost of development of mirvetuximab, and would harm our competitive position in the
marketplace.

Moreover, even if we receive accelerated approval from the FDA, we will be subject to rigorous post-

marketing requirements, including the completion of confirmatory post-market clinical trial(s) to verify the clinical
benefit of mirvetuximab, and submission to the FDA of all promotional materials 30-120 days prior to their
dissemination. Products that receive accelerated approval may be subject to expedited withdrawal procedures if
post-marketing studies fail to verify the predicted clinical benefit. The FDA could seek to withdraw accelerated
approval for multiple reasons, including if we fail to conduct any required post-market study, a post-market study
does not confirm the predicted clinical benefit, other evidence shows that the product is not safe or effective under the
conditions of use, or we disseminate promotional materials that are found by the FDA to be false or misleading.

Side effects, serious adverse events, or other undesirable properties could arise from the use of
mirvetuximab or our other clinical product candidates and, in turn, could delay or halt clinical trials, delay
or prevent its regulatory approval, limit the commercial profile of its labeling, if approved, or result in
significant negative consequences following any marketing approval.

Undesirable side effects or serious adverse events caused by mirvetuximab or our other clinical product
candidates could cause us or regulatory authorities to interrupt, delay, or halt respective clinical trials and could
result in a restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign
regulatory authorities.

Any related drug-side effects or serious adverse events in our clinical trials could affect clinical trial patient

recruitment or the ability of enrolled patients to complete the clinical trial or result in potential product liability claims.

In our Phase 3 SORAYA trial evaluating the safety and efficacy of mirvetuximab monotherapy in patients

with FR(cid:302)-high platinum-resistant epithelial ovarian, primary peritoneal, or fallopian tube cancer who had been
previously treated with Avastin® (bevacizumab), the most commonly reported treatment-related adverse events
included ocular events and low grade gastrointestinal events. Treatment-related adverse events leading to drug
discontinuation occurred in 7% of patients.

In the randomized Phase 3 FORWARD I trial evaluating mirvetuximab compared to chemotherapy in women

with FR(cid:302)-positive, platinum-resistant epithelial ovarian, primary peritoneal, or fallopian tube cancer, the most
common drug-related adverse events included nausea, blurred vision, and keratopathy.

In the Phase 1b FORWARD II study, doublet combinations of mirvetuximab with carboplatin and with

bevacizumab were studied, as well as a triplet of mirvetuximab with carboplatin and bevacizumab. In these
combinations, no new safety signals were seen; adverse events observed with the combinations were as expected
based on the side effect profiles of each agent and duration of therapy.

Additionally, if mirvetuximab receives marketing approval, and we or others later identify undesirable side

effects or serious adverse events caused by mirvetuximab, a number of potentially significant negative consequences
could result, including:

(cid:131) we may suspend or be forced to suspend marketing of mirvetuximab;

(cid:131) we may be obliged to conduct a product recall or product withdrawal;

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regulatory authorities may suspend, vary, or withdraw their approvals of mirvetuximab;

regulatory authorities may order the seizure of mirvetuximab;

regulatory authorities may require additional warnings on the label or a risk evaluation and
mitigation strategy (REMS) that could diminish the usage or otherwise limit the
commercial success of mirvetuximab;

(cid:131) we may be required to conduct post-marketing studies;

(cid:131) we could be sued and held liable for harm caused to patients;

(cid:131) we could be required to pay fines and face other administrative, civil, and criminal penalties; and

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our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of mirvetuximab, if

approved.

We have received orphan drug designation for mirvetuximab and other product candidates for specified
indications; we may seek additional orphan drug designation for additional indications and for our other drug
candidates. However, we may be unsuccessful in obtaining or may be unable to maintain the benefits associated
with orphan drug designation, including the potential for market exclusivity.

Mirvetuximab has been granted orphan drug designation by the FDA in the United States, and orphan
medicinal product status by the EMA in the European Union for the treatment of ovarian cancer. Pivekimab has
been granted orphan drug designation by the FDA for the treatment of AML and for the treatment of BPDCN, and
by the EMA for the treatment of BPDCN. As part of our business strategy, we may seek orphan drug designation for
our other drug candidates; however, we may be unsuccessful.

Generally, if a product with an orphan drug designation subsequently receives the first marketing

approval for the indication for which it has such designation, the product is entitled to a period of marketing
exclusivity, which precludes the EMA or the FDA from approving another marketing application for the same drug
or biologic for that time period. Even if we obtain orphan drug exclusivity for a drug, that exclusivity may not
effectively protect the designated drug from competition because different drugs can be approved for the same
condition. Even after an orphan drug is approved, the FDA can subsequently approve another product that meets
the definition of a “same drug” under 21 C.F.R. 316.3 for the same condition if the FDA concludes that the later
product is clinically superior by evidence that it is safer, more effective, or makes a major contribution to patient
care. In addition, a designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that
is broader than the indication for which it received orphan drug designation. Moreover, orphan drug exclusive
marketing rights in the United States may be lost if the FDA later determines that the request for designation was
materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of
patients with the rare disease or condition. Orphan drug designation neither shortens the development time or
regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.
While we intend to seek additional orphan drug designation for our other drug candidates, we may never receive
such designations. Even if we receive orphan drug designation for any of our drug candidates, there is no guarantee
that we will enjoy the benefits of those designations or obtain orphan drug exclusivity.

We and our collaborators are subject to extensive government regulations and we and our collaborators may not
be able to obtain necessary regulatory approvals.

We and our collaborators may not receive the regulatory approvals necessary to commercialize our product

candidates, which would cause our business to be severely harmed. Pharmaceutical product candidates, including those
in development by us and our collaborators, are subject to extensive and rigorous government regulation. The FDA
regulates, among other things, the development, testing, manufacture, safety, record-keeping, labeling, storage, approval,
advertising, promotion, sale, and distribution of pharmaceutical products. If our potential products or our collaborators’
potential products are marketed outside of the United States, they will also be subject to extensive regulation by foreign
governments. The regulatory review and approval process, which includes preclinical studies and clinical trials of each
product candidate, is lengthy, complex, expensive, and uncertain. Securing regulatory approval requires the submission

of extensive preclinical and clinical data and supporting information to the authorities for each indication to establish the
product candidate’s safety and efficacy. Data obtained from preclinical and other nonclinical studies and clinical trials
are susceptible to varying interpretation, which may delay, limit, or prevent regulatory approval. The approval process
may take many years to complete and may involve ongoing requirements for post-marketing studies. FDA may approve
our product for indications that are significantly more limited than what we apply for or require labeling statements that
limit the use of our products, such as a boxed warning or the addition of labeling statements, including warnings, contra-
indications, or precautions. FDA may also require a REMS, which could include physician communication plans or
restricted distribution methods, such as training, certification, or other requirements for prescribers, pharmacies, or
patients. Any FDA or other regulatory approvals of our or our collaborators’ product candidates, once obtained, may be
withdrawn or limited. Any of these actions could diminish the usage of the product or otherwise limit the commercial
success of our products. The effect of government regulation may be to:

(cid:131)

delay marketing of potential products for a considerable period of time;

limit the indicated uses for which potential products may be marketed;

impose costly requirements on our activities; and

place us at a competitive disadvantage to other pharmaceutical and biotechnology companies.

We may encounter delays or rejections in the regulatory approval process because of additional government
regulation from future legislation or administrative action or changes in regulatory policy during the period of product
development, clinical trials, and regulatory review. Failure to comply with applicable regulatory requirements may result
in criminal prosecution, civil penalties, recall or seizure of products, total or partial suspension of production or
injunction, as well as other regulatory action against our product candidates or us. In addition, we are, or may become,
subject to various federal, state, and local laws, regulations, and recommendations relating to safe working conditions,
laboratory and manufacturing practices, the experimental use of animals, and the use and disposal of hazardous
substances, including radioactive compounds and infectious disease agents, used in connection with our research work.
If we fail to comply with the laws and regulations pertaining to our business, we may be subject to sanctions, including
the temporary or permanent suspension of operations, product recalls, marketing restrictions, and civil and criminal
penalties.

Our and our collaborators’ product candidates will remain subject to ongoing regulatory review even if they
receive marketing approval. If we or our collaborators fail to comply with regulations applicable to approved
products, these approvals could be lost and the sale of our or our collaborators’ products could be suspended.

Even if we or our collaborators receive regulatory approval to market a particular product candidate, the

approval could be conditioned on us or our collaborators conducting costly post-approval studies or could limit the
indicated uses included in product labeling. Moreover, the product may later cause adverse effects that limit or prevent
its widespread use, force us or our collaborators to withdraw it from the market, or impede or delay our or our
collaborators’ ability to obtain regulatory approvals in additional countries. In addition, the manufacturer of the product
and its facilities will continue to be subject to regulatory review and periodic inspections to ensure adherence to
applicable regulations. After receiving marketing approval, the manufacturing, labeling, packaging, adverse event
reporting, storage, advertising, promotion, and record-keeping related to the product remain subject to extensive
regulatory requirements. We do not have prior experience complying with regulations pertaining to products that have
already received marketing approval and, therefore, we may be unable or slow to comply with existing regulations,
including changes in existing regulatory requirements, or new regulations. Furthermore, our collaborators may be slow
to adapt, or may never adapt, to changes in existing regulatory requirements or adoption of new regulatory requirements
pertaining to products that have already received approval.

The FDA closely regulates the post-approval marketing and promotion of drugs and biologics to ensure they are
marketed only for the approved indications and in accordance with the provisions of the approved labeling. If we market
our products outside of their approved indications, we may be subject to enforcement action for off-label promotion.
Violations of the FDA’s restrictions relating to the promotion of prescription drugs may also lead to investigations
alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws.

If we or our collaborators fail to comply with the regulatory requirements of the FDA and other applicable U.S.
and foreign regulatory authorities, or if previously unknown problems with our or our partners’ products, manufacturers,
or manufacturing processes are discovered, we could be subject to administrative or judicially imposed sanctions,
including:

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restrictions on the products, manufacturers, or manufacturing processes;

(cid:131) warning letters;

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civil or criminal penalties;

fines;

injunctions;

product seizures or detentions;

import bans;

voluntary or mandatory product recalls and publicity requirements;

suspension or withdrawal of regulatory approvals;

total or partial suspension of production; and

refusal to approve pending applications for marketing approval of new drugs or supplements to
approved applications.

Any one of these could have a material adverse effect on our business or financial condition.

The FDA, EMA, or comparable foreign regulatory authorities could require the clearance or approval of a
companion diagnostic device as a condition of approval for our product candidates, which would require
substantial financial resources and could delay regulatory approval.

The FDA has indicated that approval of a companion diagnostic device may be necessary for some of our

product candidates, including mirvetuximab. We may face significant delays or obstacles in obtaining approval of our
product candidates as the FDA may take the position that a companion diagnostic device is required prior to granting
approval of the marketing application. In addition, we may be dependent on the sustained cooperation and effort of third-
party collaborators with whom we may partner in the future to develop companion diagnostics. We and our current,
potential, and future collaborators may encounter difficulties in developing such tests, including issues relating to the
selectivity and/or specificity of the diagnostic, analytical validation, reproducibility, or clinical validation, or in obtaining
regulatory clearance or approval for such companion diagnostic. For example, the FDA has indicated that a companion
diagnostic will be required for mirvetuximab and we have partnered with Ventana Medical Systems to develop the FR(cid:302)
companion diagnostic. The PMA for the companion diagnostic will be submitted concurrently with the BLA for
mirvetuximab to allow for contemporaneous FDA review of the BLA and PMA. Any delay or failure by us or our
potential and future collaborators to develop or obtain regulatory clearance or approval of such companion diagnostics, if
necessary, could delay or prevent approval of our product candidates.

Unfavorable pricing regulations, third-party reimbursement practices, or healthcare reform initiatives applicable
to our product candidates could limit our potential product revenue.

Regulations governing drug pricing and reimbursement vary widely from country to country. Some countries
require approval of the sales price of a drug before it can be marketed. Some countries restrict the physicians that can
authorize the use of more expensive medications. Some countries establish treatment guidelines to help limit the use of
more expensive therapeutics and the pool of patients that receive them. In some countries, including the United States,
third-party payers frequently seek discounts from list prices and are increasingly challenging the prices charged for
medical products. Because our product candidates are in the development stage, we do not know the level of
reimbursement, if any, we will receive for any products that we are able to successfully develop. If the reimbursement
for any of our product candidates is inadequate in light of our development and other costs, our ability to achieve
profitability would be affected. See “Regulatory Matters – Reimbursement”.

In the U.S., federal and state governments continue to propose and pass legislation designed to reform delivery
of, or payment for, health care, which include initiatives to reduce the cost of healthcare generally and drugs specifically.
For example, in March 2010, the U.S. Congress enacted the Patient Protection and Affordable Care Act and the Health
Care and Education Reconciliation Act (the “ACA”), which expanded health care coverage through Medicaid expansion
and the implementation of the individual mandate for health insurance coverage and which included changes to the
coverage and reimbursement of drug products under government healthcare programs. Since its enactment, there have
been and likely will be judicial, administrative, executive, and legislative challenges to certain aspects of the ACA. For
example, tax reform legislation was enacted at the end of 2017 that eliminates the tax penalty for individuals who do not
maintain sufficient health insurance coverage beginning in 2019 (the so-called “individual mandate”). More recently, on
June 17, 2021, the U.S. Supreme Court dismissed the latest judicial challenge to the ACA brought by several states

without specifically ruling on the constitutionality of the ACA. Changes resulting from any successful challenges or
other future modifications may have a material impact on our business.

Beyond the ACA, there are ongoing and widespread federal and state health care reform efforts, a number of

which have focused on regulation of prices or payment for drug products, including legislation on drug importation and
legislation and regulation revising the Medicaid drug rebate program. Recent state legislative efforts to address drug
costs have generally focused on increasing transparency around drug costs or limiting drug prices.

Healthcare reform efforts have been and may continue to be subject to scrutiny and legal challenge. For
example, courts temporarily enjoined regulations that would implement a new “most favored nation” payment model for
select drugs covered under Medicare Part B that was to take effect on January 1, 2021 and would limit payment based on
international drug price and CMS subsequently issued a notice of proposed rulemaking to rescind and remove the
regulations. As another example, revisions to regulations under the federal anti-kickback statute would remove
protection for traditional Medicare Part D discounts offered by pharmaceutical manufacturers to pharmacy benefit
managers and health plans. Pursuant to court order, the removal was delayed, and recent legislation imposed a
moratorium on implementation of the rule until January 1, 2026.

Health care reform at the federal or state level could affect demand for, or pricing of, our product candidates if

approved for sale. We cannot, however, predict the ultimate content, timing, or effect of any federal and state reform
efforts. There is no assurance that federal or state health care reform will not adversely affect our future business and
financial results.

As our business grows, we will become increasingly subject to additional healthcare regulation and
enforcement by various government entities, and our failure to strictly adhere to these regulatory regimes
could have a detrimental impact on our business.

In the United States, pharmaceutical manufacturers and their products are subject to extensive regulation at the

federal and state level, including laws intended to prevent fraud and abuse in the healthcare industry. These laws,
some of which will apply only if and when we have an approved product, include:

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federal false claims, false statements, and civil monetary penalties laws prohibiting, among other
things, any person from knowingly presenting, or causing to be presented, a false claim for payment of
government funds or knowingly making, or causing to be made, a false statement to get a false claim
paid;

the federal anti-kickback law, which prohibits, among other things, persons from offering, soliciting,
receiving, or providing remuneration, directly or indirectly, to induce either the referral of an
individual for, or the purchasing or ordering of, a good or service for which payment may be made
under federal healthcare programs such as Medicare and Medicaid;

the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which, in addition
to privacy protections applicable to healthcare providers and other entities, prohibits executing a
scheme to defraud any healthcare benefit program or making false statements relating to healthcare
matters;

(cid:131) FDCA, which among other things, strictly regulates drug marketing, prohibits manufacturers from
marketing products prior to approval or for off-label use, and regulates the distribution of samples;

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federal laws that require pharmaceutical manufacturers to report certain calculated product prices to
the government or provide certain discounts or rebates to government authorities or private entities,
often as a condition of reimbursement under government healthcare programs;

the federal Open Payments (or federal “sunshine” law), which requires pharmaceutical and medical
device companies to monitor and report certain financial interactions with certain healthcare providers
to the Center for Medicare & Medicaid Services within the U.S. Department of Health and Human
Services for re-disclosure to the public, as well as ownership and investment interests held by
physicians and their immediate family members;

federal consumer protection and unfair competition laws, which broadly regulate marketplace
activities and activities that potentially harm consumers;

analogous state laws and regulations, including state anti-kickback and false claims laws and state laws
governing privacy, security, and breaches of health information in certain circumstances, many of

which differ from each other in significant ways and often are not preempted by HIPAA, thus
complicating compliance efforts; and

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state laws that require pharmaceutical companies to comply with specific compliance standards,
restrict financial interactions between pharmaceutical companies and healthcare providers, report drug
product pricing information, financial interactions with health care providers, or marketing
expenditures and/or require the registration of pharmaceutical sales representatives.

Ensuring compliance is time-consuming and costly. Given the breadth of the laws and regulations, limited

guidance for certain laws and regulations, and evolving government interpretations of the laws and regulations,
governmental authorities may possibly conclude that our business practices are non- compliant. If our operations
are found to be in violation of any of the laws described above or any other government regulations that apply to
us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from
participation in government health care programs, such as Medicare and Medicaid, imprisonment, and the
curtailment or restructuring of our operations, any of which could adversely affect our business, financial
condition, results of operations, and prospects.

If we fail to comply with environmental, health, and safety laws and regulations that apply to us, we could become
subject to fines or penalties or incur costs that could harm our business.

We are subject to numerous federal, state, and local environmental, health, and safety laws and regulations,

including those governing the manufacture and transportation of hazardous materials and pharmaceutical compounds.
Although we believe that our contracted research, development, and manufacturer safety procedures for handling and
disposing of these materials comply with the standards prescribed by applicable laws and regulations, we cannot
completely eliminate the risk of accidental contamination or injury from these materials. In the event of such an
accident, we could be held liable for any resulting damages, and any liability could exceed our resources. We may be
required to incur significant costs to comply with these laws in the future, including civil or criminal fines and penalties,
which we may not be able to afford.

In addition, we may incur substantial costs in order to comply with current or future environmental, health, and

safety laws and regulations applicable to us. These current or future laws and regulations may impair our research,
development, or production efforts or impact the research activities we pursue, particularly with respect to research
involving human subjects or animal testing. Our failure to comply with these laws and regulations also may result in
substantial fines, penalties, or other sanctions, which could cause our financial condition to suffer.

Failure to comply with the Foreign Corrupt Practices Act and other similar anti-corruption laws and anti-money
laundering laws, as well as export control laws, customs laws, sanctions laws, and other laws governing our
operations could subject us to significant penalties and damage our reputation.

We are subject to the Foreign Corrupt Practices Act (FCPA), which generally prohibits U.S. companies and

intermediaries acting on their behalf from offering or making corrupt payments to “foreign officials” for the purpose of
obtaining or retaining business or securing an improper business advantage. The FCPA also requires companies whose
securities are publicly listed in the United States to maintain accurate books and records and to maintain adequate
internal accounting controls. We are also subject to other similar anti-corruption laws and anti-money laundering laws,
as well as export control laws, customs laws, sanctions laws, and other laws that apply to our activities in the countries
where we operate. Certain of the jurisdictions in which we conduct or expect to conduct business have heightened risks
for public corruption, extortion, bribery, pay-offs, theft, and other fraudulent practices. In many countries, health care
professionals who serve as investigators in our clinical studies or may prescribe or purchase any of our product
candidates if they are approved, are employed by a government or an entity owned or controlled by a government.
Dealings with these investigators, prescribers, and purchasers are subject to regulation under the FCPA. Under these
laws and regulations, as well as other anti-corruption laws, anti-money-laundering laws, export control laws, customs
laws, sanctions laws, and other laws governing our operations, various government agencies may require export licenses,
may seek to impose modifications to business practices, including cessation of business activities in sanctioned countries
or with sanctioned persons or entities and modifications to compliance programs, which may increase compliance costs,
and may subject us to fines, penalties, and other sanctions.

Inadequate funding for the FDA, the Securities and Exchange Commission, and other government agencies could
hinder their ability to hire and retain key leadership and other personnel, prevent new products and services
from being developed or commercialized in a timely manner, or otherwise prevent those agencies from
performing normal business functions, which could negatively affect our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including

government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and
statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result.
In addition, government funding of the U.S. Securities and Exchange Commission (SEC) and other government agencies
on which our operations may rely, including those that fund research and development activities is subject to the political
process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time required for new drugs to be reviewed and/or

approved by necessary government agencies, which would adversely affect our business. For example, the U.S.
government has shut down several times, including December 22, 2018 to January 25, 2019, and certain regulatory
agencies, such as the FDA and the SEC, have had to furlough employees and stop critical activities. If a prolonged
government shutdown or a series of shutdowns occurs, it could significantly affect the ability of the FDA to timely
review and process our regulatory submissions, which could have a material adverse effect on our business. Further,
future government shutdowns could impact our ability to gain access to the public markets and obtain necessary capital
in order to properly capitalize and continue our operations.

We may be subject to, or may in the future become subject to, U.S. federal and state and foreign laws and
regulations imposing obligations on how we collect, use, disclose, store, and process personal information. Our
actual or perceived failure to comply with such obligations could result in liability or reputational harm and
adversely affect our business. Ensuring compliance with such laws could also impair our efforts to maintain and
expand our customer base, and thereby decrease our revenue.

In many activities, including the conduct of clinical trials, we are subject to laws and regulations governing data

privacy and the protection of health-related and other personal information. These laws and regulations govern our
processing of personal data, including the collection, access, use, analysis, modification, storage, transfer, destruction,
and disposal of personal data. They also impose requirements with respect to notification and remediation of security
breaches involving personal data. We must comply with laws and regulations associated with the international transfer of
personal data based on the location in which the personal data originates and the location in which such data are
processed. While we strive to comply with all applicable privacy and security laws and regulations, legal standards for
privacy continue to evolve and any failure or perceived failure to comply may result in proceedings or actions against us
by government entities or others, or could cause reputational harm, which could have a material adverse effect on our
business.

The legislative and regulatory landscape for privacy and data security continues to evolve. For example, the EU

General Data Protection Regulation (GDPR), which was effective as of May 25, 2018, introduced new data protection
requirements in the European Union relating to the consent of the individuals to whom the personal data relate, the
information provided to the individuals, the documentation we must retain, the security and confidentiality of the
personal data, data breach notification, and the use of third party processors in connection with the processing of
personal data. The GDPR has increased our responsibility and potential liability in relation to personal data that we
process, and we may be required to put in place additional mechanisms to ensure compliance with the GDPR. However,
our ongoing efforts related to compliance with the GDPR may not be successful and could increase our cost of doing
business. In addition, data protection authorities of the different EU member states may interpret the GDPR differently,
and guidance on implementation and compliance practices are often updated or otherwise revised, which adds to the
complexity of processing personal data in the European Union.

In the United States, California adopted the California Consumer Privacy Act of 2018 (CCPA), which became

effective in January 2020. The CCPA has been characterized as the first “GDPR-like” privacy statute to be enacted in
the United States because it mirrors a number of the key provisions of the EU GDPR. The CCPA establishes a new
privacy framework for covered businesses by creating an expanded definition of personal information, establishing new
data privacy rights for consumers in the State of California, imposing special rules on the collection of consumer data
from minors, and creating a new and potentially severe statutory damages framework for violations of the CCPA and for
businesses that fail to implement reasonable security procedures and practices to prevent data breaches. The California
Privacy Rights Act will impose additional obligations on companies processing personal information of California
residents beyond those found in the CCPA when it takes effect in January 2023.

We expect to be subject to additional privacy laws at both the U.S. state level and abroad as many jurisdictions

worldwide in addition to those examples discussed above have either recently passed data privacy legislation or are
considering enacting such legislation.

Risks Related to Our Key Personnel and Other Service Providers

We depend on our key personnel, and we must continue to attract and retain key employees and consultants.

We depend on our key scientific and management personnel. Our ability to pursue the development of our
current and future product candidates depends largely on retaining the services of our existing personnel and hiring
additional qualified scientific personnel to perform research and development. Although we have entered into
employment agreements with our executive officers, each of them may terminate their employment with us at any time.
We do not maintain “key person” insurance for any of our executives or other employees. In addition, we rely on
consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and
development and commercialization strategy. Our consultants and advisors may be employed by employers other than us
and may have commitments under consulting or advisory contracts with other entities that may limit their availability to
us. If we are unable to continue to attract and retain high-quality personnel, our ability to pursue our growth strategy will
be limited. We will also need to hire personnel with expertise in clinical testing, government regulation, manufacturing,
sales, marketing, distribution, and finance. Attracting and retaining qualified personnel will be critical to our success. We
may not be able to attract and retain personnel, or, in the event key personnel leave, suitable replacements for such
personnel, on acceptable terms given the competition for such personnel among biotechnology, pharmaceutical, and
healthcare companies, universities, and non-profit research institutions. Failure to retain our existing key management
and scientific personnel or to attract additional highly qualified personnel could delay the development of our product
candidates and harm our business.

Our employees, independent contractors, principal investigators, CROs, consultants, and collaborators may
engage in misconduct or other improper activities, including noncompliance with regulatory standards and
requirements and insider trading.

We are exposed to the risk that our employees, independent contractors, principal investigators, third-party

contract research organizations (CROs), consultants, and collaborators may engage in fraudulent conduct or other illegal
activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or unauthorized
activities that violate: (1) laws or regulations in jurisdictions where we are performing activities in relation to our
product candidates, including those laws requiring the reporting of true, complete, and accurate information to such
authorities; (2) manufacturing regulations and standards; (3) applicable laws prohibiting the promotion of a medical
product for a use that has not been cleared or approved; (4) fraud and abuse, anti-corruption, and anti-money laundering
laws, as well as similar laws and regulations and other laws; or (5) laws that require the reporting of true and accurate
financial information and data. In particular, sales, marketing, and business arrangements in the healthcare industry are
subject to laws intended to prevent fraud, bias, misconduct, kickbacks, self-dealing, and other abusive practices, and
these laws may differ substantially from country to country. Misconduct by these parties could also include the improper
use of information obtained in the course of clinical trials or performing other services, which could result in
investigations, sanctions, and serious harm to their or our reputation. It is not always possible to identify and deter
misconduct by these parties, and the precautions and procedures we currently take or may establish in the future as our
operations and employee, CRO, consultant, and collaborator base expands to detect and prevent this type of activity may
not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental
investigations or other actions or lawsuits stemming from a failure by these parties to comply with such laws or
regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting
our rights, those actions could have a significant impact on our business and results of operations, including the
imposition of significant fines or other sanctions. In addition, we have limited experience with respect to laws governing
the commercial sale of pharmaceutical products. We will need to implement measures to maintain compliance with these
laws if any of our product candidates are approved. The failure to adequately implement and maintain these measures
could negatively affect our sales and marketing activities and our business.

Risks Related to Our Technology Systems

Our business and operations could suffer in the event of system failures.

We utilize information technology systems and networks to process, transmit, and store electronic information

in connection with our business activities. As use of digital technologies has increased, cyber incidents, including
deliberate attacks and attempts to gain unauthorized access to computer systems and networks, have increased in
frequency and sophistication. These threats pose a risk to the security of our systems and networks and the
confidentiality, availability, and integrity of our data. There can be no assurance that we will be successful in preventing
cyber-attacks or successfully mitigating their effects.

Despite the implementation of security measures, our internal computer systems, and those of our CROs and
other contractors and consultants, are vulnerable to damage from cyber-attack, computer viruses, unauthorized access,
natural disasters, terrorism, war, and telecommunication and electrical failures. Furthermore, we have little or no control
over the security measures and computer systems of our third-party CROs and other contractors and consultants. While
we have not experienced any such system failure, accident, or security breach to date, if such an event were to occur and
cause interruptions in our operations, it could result in a material disruption of our programs. For example, the loss of
clinical trial data for our product candidates could result in delays in our marketing approval efforts and significantly
increase our costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of
or damage to our data or applications or other data or applications relating to our technology or product candidates, or
inappropriate disclosure of confidential or proprietary information, we could incur liabilities and the further development
of our product candidates could be delayed.

Risks Related to the Ownership of Our Common Stock

Our stock price may be volatile and fluctuate significantly and results announced by us and our collaborators or
competitors could cause our stock price to decline.

Our stock price could fluctuate significantly due to the risks listed in this section, business developments
announced by us and by our collaborators and competitors, or as a result of market trends and daily trading volume. The
business developments that could affect our stock price include disclosures related to clinical findings with compounds
that make use of our ADC technology, new collaborations, clinical advancement, or discontinuation of product
candidates that make use of our ADC technology or product candidates that compete with our compounds or those of our
collaborators, and regulatory approvals for our product candidates, if any, or product candidates that compete with our
compounds or those of our collaborators. Our stock price could also fluctuate significantly with the level of overall
investment interest in small-cap biotechnology stocks or for other reasons unrelated to our business.

Our operating results have fluctuated in the past and are likely to continue to do so in the future. Our revenue is

unpredictable and may fluctuate due to the timing of non-recurring licensing fees, decisions of our collaborators with
respect to our agreements with them, and the achievement of milestones and our receipt of the related milestone
payments under new and existing licensing and collaboration agreements. Revenue historically recognized under our
prior collaboration agreements may not be an indicator of revenue from any future collaboration. In addition, our
expenses are unpredictable and may fluctuate from quarter to quarter due to the timing of expenses, which may include
obligations to manufacture or supply product or payments owed by us under licensing or collaboration agreements. It is
possible that our quarterly and/or annual operating results will not meet the expectations of securities analysts or
investors, causing the market price of our common stock to decline. We believe that quarter-to-quarter and year-to-year
comparisons of our operating results are not good indicators of our future performance and should not be relied upon to
predict the future performance of our stock price.

The potential sale of additional shares of our common stock may cause our stock price to decline.

We may seek additional capital due to market conditions or strategic considerations even if we believe we have
sufficient funds for our current or future operating plans through a variety of means, including through private and public
equity offerings and debt financings. To the extent that we raise additional capital through the sale of equity or
convertible debt securities, ownership interest of existing shareholders will be diluted, and the price of our stock may
decline. The price of our common stock may also decline if the market expects us to raise additional capital through the
sale of equity or convertible debt securities whether or not we actually plan to do so.

We do not intend to declare or pay cash dividends on our common stock in the foreseeable future.

We have not declared or paid cash dividends on our common stock since our inception and do not intend to

declare or pay cash dividends in the foreseeable future. We currently intend to retain all of our future earnings, if any, to
finance the growth and development of our business. Therefore, shareholders will have to rely solely on appreciation in
our stock price, if any, in order to achieve a gain on an investment.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We lease approximately 120,000 square feet of laboratory and office space in a building located at 830 Winter

Street, Waltham, MA. The term of the 830 Winter Street lease expires on March 31, 2026, with an option for us to

extend the lease for two additional five-year terms. In 2020, we sublet approximately 65,000 square feet of this space
through the remaining term of the initial lease, and we continue to use the remaining space.

Item 3. Legal Proceedings

From time to time, we may be a party to various legal proceedings arising in the ordinary course of our

business. We are not currently subject to any material legal proceedings.

Item 4. Mine Safety Disclosures

None.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity

Securities

Market Price of Our Common Stock and Related Stockholder Matters

Our common stock is quoted on the Nasdaq Global Select Market under the symbol “IMGN.” As of

February 16, 2022, we had 389 holders of record of our common stock.

We have not paid any cash dividends on our common stock since our inception and do not intend to pay any

cash dividends in the foreseeable future.

Recent Sales of Unregistered Securities; Uses of Proceeds from Registered Securities; Issuer Repurchases of
Equity Securities

None.

Item 6. Reserved

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a clinical-stage biotechnology company focused on developing the next generation of ADCs to

improve outcomes for cancer patients. By generating targeted therapies with enhanced anti-tumor activity and
favorable tolerability profiles, we aim to disrupt the progression of cancer and offer patients more good days. We call
this our commitment to “target a better now.”

An ADC with our proprietary technology comprises an antibody that binds to a target found on tumor cells

We have established a leadership position in ADCs with a portfolio of differentiated product candidates

addressing both solid tumors and hematologic malignancies.

Our Business

Our lead program is mirvetuximab, a first-in-class investigational ADC targeting FR(cid:302), a cell-surface protein

over-expressed in a number of epithelial tumors, including ovarian, endometrial, and non-small-cell lung cancers.
Following consultation with the FDA, we initiated two trials of mirvetuximab in patients with platinum-resistant
ovarian cancer whose tumors express FR(cid:302)-high: SORAYA, a single-arm clinical trial that could lead to accelerated
approval, pending FDA review; and MIRASOL, a randomized Phase 3 clinical trial that, if successful, could lead to
full approval in this setting.

Beyond FR(cid:302)-high, platinum-resistant ovarian cancer in patients who had one or more prior lines of therapy,
our strategy is to move mirvetuximab into platinum-sensitive disease and become the combination agent of choice in
ovarian cancer. To this end, we initiated PICCOLO, a single-arm study of mirvetuximab monotherapy in later-line
platinum-sensitive patients. We have also generated encouraging data in recurrent platinum-sensitive disease with the
combination of mirvetuximab plus carboplatin and are supporting ISTs with this combination in a single-arm study in
the neoadjuvant setting and in a randomized study comparing mirvetuximab combined with carboplatin to standard of
care in patients with recurrent platinum-sensitive disease. We also intend to initiate a single-arm Phase 2 study (0420)
of this combination followed by mirvetuximab continuation in FR(cid:302)-low, medium, and high patients with platinum-
sensitive disease. Results from this study and our ongoing ISTs will inform a path to the potential registration for
mirvetuximab plus carboplatin and, in parallel, could support compendia listing for this combination.

In addition, we presented mature data from our Phase 1b FORWARD II trial of mirvetuximab plus Avastin®

(bevacizumab) in recurrent ovarian cancer in an oral presentation at the American Society for Clinical Oncology
Annual Meeting in June 2021 and believe the data could support compendia listing for this combination in close
proximity to the initial monotherapy approval of mirvetuximab. Furthermore, we recently aligned with FDA on
GLORIOSA, a potential randomized Phase 3 study of mirvetuximab plus bevacizumab maintenance in FR(cid:302)-high
recurrent platinum-sensitive disease. We expect to initiate this potential label-enabling study in the second quarter of
2022.

Pivekimab, formerly known as IMGN632, is an ADC comprised of a high-affinity antibody designed to target

CD123 with site-specific conjugation to a DNA-alkylating payload of the novel IGN class. Our IGNs are designed to
alkylate DNA without cross-linking, which has provided a broad therapeutic index in preclinical models. We are
advancing pivekimab in clinical trials for patients with BPDCN and AML.

BPDCN is a rare form of blood cancer, with an annual incidence of between 500 and 1,000 patients in the US.
In October 2020, the FDA granted Breakthrough Therapy designation for pivekimab for the treatment of patients with
relapsed or refractory BPDCN. Based on feedback from the FDA, we amended our ongoing 801 Phase 2 study, known
as CADENZA, to include a new cohort of up to 20 frontline BPDCN patients. We now expect to generate top-line data
for this frontline cohort in the second half of 2022.

We are also conducting our 802 study for pivekimab, which is a Phase 1b/2 study designed to determine the

safety, tolerability, and preliminary antileukemia activity of pivekimab when administered in combination with
azacytidine and venetoclax to patients with relapsed and frontline CD123-positive AML. This study is in dose-
escalation, enrolling relapsed and refractory patients to determine the recommended Phase 2 dose of pivekimab for
the triplet combination regimen. We are in the final stages of determining the recommended Phase 2 dose for this
triplet

combination and expect to initiate expansion cohorts in relapsed and frontline patients this year.

In addition, we are advancing our earlier-stage pipeline programs. IMGC936 is an ADC in co-development
with MacroGenics, Inc. that is designed to target ADAM9, an enzyme over-expressed in a range of solid tumors and
implicated in tumor progression and metastasis. IMGC936 incorporates a number of innovations, including antibody
engineering to extend half-life, site-specific conjugation with a fixed drug-antibody ratio to enable higher dosing, and a
next-generation linker and payload designed for improved stability and bystander activity. We continue to enroll patients
in the Phase 1 study for this program and expect initial data in 2022.

IMGN151 is our next generation anti-FR(cid:302) product candidate in preclinical development. This ADC integrates

innovation in each of its components, which we believe may enable IMGN151 to address patient populations with
lower levels of FR(cid:302) expression, including tumor types outside of ovarian cancer. In January 2022, we submitted an
IND application to evaluate IMGN151 in a planned Phase 1 clinical trial in patients with recurrent endometrial cancer
and recurrent, high-grade serous epithelial ovarian, primary peritoneal, or fallopian tube cancers. In February 2022, the
FDA placed a clinical hold on our IND application pending the resolution of certain chemistry, manufacturing, and
controls, or CMC, information requests. We are generating data responsive to the requests and anticipate filing these
responses mid-year, which we believe will enable us to proceed with the study in due course thereafter.

We have selectively licensed restricted access to our ADC platform technology to other companies to expand

the use of our technology and to provide us with cash to fund our own product programs. These agreements typically
provide the licensee with rights to use our ADC platform technology with its antibodies or related targeting vehicles to a
defined target to develop products. The licensee is generally responsible for the development, clinical testing,
manufacturing, registration, and commercialization of any resulting product candidate. As part of these agreements, we
are generally entitled to receive upfront fees, potential milestone payments, and royalties on the sales of any resulting
products. For more information concerning these relationships, including their ongoing financial and accounting impact
on our business, please read Note C, “Significant Collaborative Agreements,” to our consolidated financial statements
included in this report.

To date, we have not generated revenues from commercial sales of internal products, and we expect to continue

to incur substantial operating losses for at least the near term as we incur significant operating expenses related to
research and development and the potential commercialization of our portfolio. As of December 31, 2021, we had
$478.8 million in cash and cash equivalents compared to $293.9 million as of December 31, 2020.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with accounting principles generally accepted
in the U.S. The preparation of these financial statements requires us to make certain estimates and judgments that affect
the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the
consolidated financial statements, and the reported amounts of revenues and expenses during the reported periods. These
items are monitored and analyzed by management for changes in facts and circumstances, and material changes in these
estimates could occur in the future. Changes in estimates are reflected in reported results for the period in which the
change occurs. We base our estimates on historical experience and various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ from our estimates if past experience or other assumptions
do not turn out to be substantially accurate.

We believe that our application of the following accounting policies, each of which requires significant
judgments and estimates on the part of management, are the most critical to aid in fully understanding and evaluating our
reported financial results:

•
•

•

revenue recognition;

clinical trial accruals; and

stock-based compensation.

Our accounting policies are more fully described in the Notes to our consolidated financial statements,

including Note B, “Summary of Significant Accounting Policies,” included in this Annual Report on Form 10-K.

Managing the Impact of the COVID-19 Pandemic

Since the first quarter of 2020, we have continued to move our clinical studies forward while adapting to meet

inventory on hand for all of our ongoing and near-term studies and to support the launch of mirvetuximab, if approved.
From a regulatory perspective, since the beginning of the pandemic, we have received timely reviews of our submissions
to the FDA and other health authorities covering our clinical trial applications.

The impact of COVID-19 slowed site activation and patient enrollment for both SORAYA and MIRASOL,

which resulted in a limited delay in patient accrual for each of these studies.

Results of Operations

For a discussion related to the results of operations for 2020 compared to 2019, refer to Part II, Item 7,

"Management's Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations" in
our Annual Report on Form 10–K for the year ended December 31, 2020 filed with the SEC on March 1, 2021.

Revenues

For 2021, our total revenues decreased to $69.9 million compared to $132.3 million for 2020, driven by
decreases in license and milestone fees and non-cash royalty revenue, both of which are discussed further below.

License and milestone fees

The amount of license and milestone fees we earn is directly related to the number of our collaborators, the

collaborators’ advancement of the product candidates, and the overall success in clinical trials of the product candidates.
As such, the amount of license and milestone fees may vary widely from quarter to quarter and year to year. Total
revenue recognized from license and milestone fees for the years ended 2021 and 2020 was $22.7 million and $63.7
million, respectively. In 2020, we recognized $60.5 million of previously deferred license revenue upon Jazz’s opt-out of
its right to the last remaining license under its collaboration and option agreement, which drove the decrease in license
and milestone fee revenue in 2021 compared to 2020. Partially offsetting this decrease, we recorded $7.4 million of
revenue related to partner milestones achieved in 2021 and, pursuant to our license agreement with Huadong executed in
October 2020, upon delivery of initial clinical supply in 2021, we recorded $14.6 million of the $40.0 million upfront
payment previously deferred.

Deferred revenue of $92.1 million as of December 31, 2021 includes $28.5 million related to the collaboration

with Huadong and $57.6 million related to the sale of our residual rights to receive royalty payments on commercial
sales of KADCYLA in 2019, with the remainder of the balance primarily representing consideration received from our
other collaborators pursuant to our license agreements that we have yet to earn pursuant to our revenue recognition
policy.

Non-cash royalty revenue related to the sale of future royalties

KADCYLA is a marketed ADC resulting from one of our development and commercialization licenses with

Roche, through its Genentech unit. We receive royalty reports and payments related to sales of KADCYLA from Roche
one quarter in arrears. We sold our rights to receive royalty payments on the net sales of KADCYLA through two
separate transactions in 2015 and 2019. In accordance with our revenue recognition policy, $46.8 million and $68.5
million of non-cash royalties on net sales of KADCYLA were recorded and included in royalty revenue for 2021 and
2020, respectively. The decrease in non-cash royalty revenue in 2021 compared to 2020 is a result of the aggregate
royalty threshold, as outlined in the 2015 royalty purchase agreement, being met in the second quarter of 2021,
effectively reducing the royalty payments under the 2015 transaction from 100% to 15% of KADCYLA royalty
payments received over the remaining royalty term. Pursuant to the terms of these agreements, we expect to recognize
less non-cash royalty revenue in 2022 and subsequent years as compared to 2021 and prior years. See further details
regarding these agreements in Note F, “Liability Related to Sale of Future Royalties,” of the Consolidated Financial
Statements.

Research and Development Expenses

Our research and development expenses relate to (i) research to evaluate new targets and to develop and

evaluate new antibodies, linkers, and cytotoxic agents, (ii) preclinical testing of our own and, in certain instances, our
collaborators’ product candidates, and the cost of our own clinical trials, (iii) development related to clinical and
commercial manufacturing processes, (iv) regulatory activities, and (v) external manufacturing operations.

Clinical trial and regulatory approval processes for our product candidates that have advanced or that we intend
to advance to clinical testing are lengthy, expensive, and uncertain in both timing and outcome. As a result, the pace and
timing of the clinical development of our product candidates is highly uncertain and may never result in approved
products. Completion dates and development costs will vary significantly for each product candidate and are difficult to
predict. A variety of factors, many of which are outside our control, could cause or contribute to the prevention or delay

of the successful completion of our clinical trials, or delay or prevent our obtaining necessary regulatory approvals. The
costs to take a product through clinical trials are dependent upon, among other factors, the clinical indications, the
timing, size, and design of each clinical trial, the number of patients enrolled in each trial, and the speed at which
patients are enrolled and treated. Product candidates may be found to be ineffective or to cause unacceptable side effects
during clinical trials, may take longer to progress through clinical trials than anticipated, may fail to receive necessary
regulatory approvals, or may prove impractical to manufacture in commercial quantities at reasonable cost or with
acceptable quality.

The lengthy process of securing FDA approvals for new drugs requires the expenditure of substantial resources.
Any failure by us to obtain, or any delay in obtaining, regulatory approvals, could materially adversely affect our product
development efforts and our business overall. Accordingly, we cannot currently estimate, with any degree of certainty,
the amount of time or money that we will be required to expend in the future on our product candidates prior to their
regulatory approval, if such approval is ever granted.

Research and development expense was $151.1 million and $114.6 million for 2021 and 2020, respectively,

with increased expenses related to personnel, third-party staffing costs, contract services, external manufacturing costs,
and clinical trial costs, which are discussed further below.

We do not track our research and development costs by project. Since we use our research and development

resources across multiple research and development projects, we manage our research and development expenses within
each of the categories listed in the following table and described in more detail below (in thousands):

Research and Development Expenses
Preclinical and clinical testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Process and product development . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total research and development expenses . . . . . . . . . . . . . . . . . . . . . . $

2021

99,971 $
7,010
44,136
151,117 $

2020

75,430
5,430
33,732
114,592 $

Year Ended
December 31,

Increase/
(Decrease)

24,541
1,580
10,404
36,525

Preclinical and clinical testing

Preclinical and clinical testing includes expenses related to preclinical testing of our own, and, in certain
instances, our collaborators’ product candidates, regulatory activities, and the cost of clinical trials. Such expenses
include those related to personnel, third-party staffing, patient enrollment at our clinical testing sites, consultant fees,
contract services, and facilities. Preclinical and clinical testing expenses increased to $100.0 million for 2021 compared
to $75.4 million for 2020. This increase is primarily the result of increased clinical trial, personnel, and third-party
staffing costs related to advancing the MIRASOL, SORAYA, PICCOLO, and IMGC936 studies and increased third-
party service fees in support of commercial readiness.

Process and product development

Process and product development expenses include costs for development of clinical and commercial
manufacturing processes for our own and collaborator compounds. Such expenses include the costs of personnel, third-
party staffing, contract services, and facility expenses. Process and product development expenses increased to $7.0
million for 2021 compared to $5.4 million for 2020, due primarily to increased personnel and third-party staffing costs.

Manufacturing operations

Manufacturing operations expense includes costs to have preclinical and clinical materials manufactured for our

product candidates and quality control and quality assurance activities. Such expenses include personnel, third-party
staffing, raw materials for our preclinical studies and clinical trials, non-pivotal and pivotal development costs with
contract manufacturing organizations, and facility expenses. Manufacturing operations expense increased $10.4 million
to $44.1 million for 2021 compared to 2020. The increase in 2021 is principally due to increases in external
manufacturing activity across our programs, and to a lesser extent, increases in personnel and third-party staffing costs.

Manufacturing operations expense also includes antibody development and supply expense in support of
commercial validation and in anticipation of potential future clinical trials, as well as our ongoing trials, was $20.6
million and $20.2 million for 2021 and 2020, respectively. The process of antibody production is lengthy due in part to
the lead time to establish a satisfactory production process at a vendor. Accordingly, costs incurred related to antibody
production and development have fluctuated from period to period and we expect these cost fluctuations to continue in
the future.

General and Administrative Expenses

General and administrative expenses increased $5.2 million to $43.8 million for 2021 due primarily to increases

in professional services and personnel expenses, including $2.0 million of greater stock-based compensation driven
largely by expense recorded in 2021 related to certain performance stock options becoming probable of vesting.

Restructuring Charges

During 2020, we recorded $1.5 million of restructuring charges, primarily incremental retention benefits,

related to the restructuring of the business in 2019. No similar expense was recorded in 2021.

Investment Income, net

Investment income for 2021 and 2020 was $0.1 million and $0.7 million, respectively. The decrease in 2021

was driven by a decrease in interest rates.

Non-Cash Interest Expense on Liability Related to Sale of Future Royalty

In 2015, IRH purchased our right to receive 100% of the royalty payments on commercial sales of KADCYLA
arising under our development and commercialization license with Genentech, subject to a residual cap. In January 2019,
OMERS purchased IRH’s right to the royalties the Company previously sold in 2015. As described in Note F, “Liability
Related to Sale of Future Royalties,” to our Consolidated Financial Statements, this royalty sale transaction has been
recorded as a liability that amortizes over the estimated royalty payment period as KADCYLA royalties are remitted
directly to the purchaser. During 2021 and 2020, we recorded $13.1 million and $23.1 million, respectively, of non-cash
interest expense, which includes amortization of deferred financing costs. The decrease in 2021 was a result of a lower
average royalty liability balance for the year and the KADCYLA royalty threshold being met in the second quarter of
2021, effectively reducing the royalty payments under the 2015 transaction from 100% to 15% of KADCYLA royalty
payments received over the remaining royalty term.

We record interest expense at the imputed interest rate, which we currently estimate to be 19.5%. There are a

number of factors that could materially affect the estimated interest rate in the future, in particular, the estimated amount
and timing of royalty payments from future net sales of KADCYLA. We assess this estimate on a periodic basis and any
resulting change in interest rate will be adjusted prospectively.

Other (Expense) Income, net

Other (expense) income, net for 2021 and 2020 was $(1.1) million and $0.5 million, respectively, consisting of

foreign currency exchange (losses) gains related to obligations with non-U.S. dollar-based suppliers and Euro cash
balances maintained to fulfill them during the respective periods.

Liquidity and Capital Resources

For a discussion related to our cash flows for 2020 compared to 2019, refer to Part II, Item 7, "Management's

Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources" in our
Annual Report on Form 10–K for the year ended December 31, 2020 filed with the SEC on March 1, 2021.

The following tables show certain balance sheet and cash flow information as of and for the periods indicated

(in thousands):

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As of December 31,
2020
293,856
201,931
89,570

2021
478,750 $
399,054
325,586

Cash used for operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (169,416) $
Cash (used for) provided by investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1,434)
355,744

2021

2020
(78,620)
509
195,742

Year Ended December 31,

Cash Flows

We require cash to fund our operating expenses, including the advancement of our clinical programs, and to

make capital expenditures. Historically, we have funded our cash requirements primarily through equity and convertible
debt financings in private and public markets and payments from our collaborators, including license fees, milestones,
research funding, and royalties. We also monetized our rights to receive royalties on KADCYLA for upfront
consideration. As of December 31, 2021, we had $478.8 million in cash and cash equivalents. Net cash used for
operating activities was $169.4 million and $78.6 million during 2021 and 2020, respectively. The principal use of cash
in operating activities for these periods was to fund our net loss, adjusted for non-cash items, with 2020 benefiting from
a $40.0 million upfront payment from Huadong pursuant to a collaboration and license agreement.

Net cash (used for) provided by investing activities was $(1.4) million and $0.5 million for 2021 and 2020,

respectively, and represent cash outflows from capital expenditures, net of proceeds generated from the sale of capital
assets. Capital expenditures for all periods presented consisted primarily of furniture and improvements related to
COVID-19 safety measures, computer and office equipment, and dedicated equipment at third-party manufacturing
vendors. During 2020, as a result of our restructuring of the business in 2019, we sold excess equipment generating
proceeds of $1.5 million.

Net cash provided by financing activities was $355.7 million and $195.7 million for 2021 and 2020,
respectively. In December 2021, pursuant to a public offering, we issued and sold 17.5 million shares of common stock
and issued pre-funded warrants to purchase 27.4 million shares of common stock, resulting in aggregate net proceeds of
$277.6 million. In August 2021, pursuant to a Securities Purchase Agreement with RA Capital Healthcare Fund, L.P.,
we issued a pre-funded warrant to purchase up to approximately 5.4 million shares of common stock, resulting in net
proceeds of $29.8 million. Additionally, during 2021, we sold 6.7 million shares of our common stock under our Open
Market Sale AgreementSM (Sale Agreement) with Jefferies, LLC as sales agent, dated December 18, 2020, generating
net proceeds of $45.8 million. Pursuant to the Sale Agreement, we may offer and sell, from time to time, shares of our
common stock having an aggregate offering price of up to $150.0 million. As of December 31, 2021, $102.7 million
remains available under the Sale Agreement. In connection with entering into the Sale Agreement, we filed a prospectus
supplement to the prospectus included in our registration statement on Form S-3 (No. 333-251502), which became
effective upon filing on December 18, 2020, with the SEC relating to the offer and sale of the up to $150.0 million of our
common stock under the Sale Agreement.

In January 2020, pursuant to a public offering, we issued and sold 24.5 million shares of common stock,
resulting in net proceeds of $97.7 million. Additionally in September 2020, we entered into an Open Market Sale
AgreementSM with Jefferies, LLC as sales agent, pursuant to which we could offer and sell, from time to time, shares of
our common stock in 2020 having an aggregate offering price of up to $100.0 million. Under the September Sale
Agreement, we offered and sold approximately 20.0 million shares of our common stock resulting in net proceeds of
$96.5 million.

Net cash provided by financing activities for 2021 and 2020 also include proceeds from the exercise of stock

options and sale of shares through our ESPP.
Future Capital Requirements

We have significant future capital requirements including:

•

•
•

significant expected operating expenses to conduct research and development activities and to
potentially commercialize our portfolio;

noncancelable in-process and future manufacturing obligations; and

substantial facility lease obligations as described in Note J, “Leases,” included in this Annual Report
on Form 10-K.

We anticipate that our current capital resources will enable us to meet our operational expenses and capital

requirements for more than twelve months after the date of this report. We may raise additional funds through equity,
debt, and other financings or generate revenues from collaborators through a combination of upfront license payments,

milestone payments, royalty payments, and research funding. We cannot provide assurance that we will be able to obtain
additional debt, equity, or other financing or generate revenues from collaborators on terms acceptable to us or at all.
Should we or our partners not meet some or all of the terms and conditions of our various collaboration agreements or if
we are not successful in securing future collaboration agreements, we may elect or be required to secure alternative
financing arrangements, and/or defer or limit some or all of our research, development, and/or clinical projects.

Recent Accounting Pronouncements

The information set forth under Note B to the consolidated financial statements under the caption “Recently

Adopted Accounting Pronouncements” is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

We maintain an investment portfolio in accordance with our investment policy. The primary objectives of our

investment policy are to preserve principal, maintain proper liquidity to meet operating needs, and maximize yields. Our
investments are comprised of money market funds consisting principally of U.S. Government-issued securities and high
quality, short-term commercial paper. We do not currently own derivative financial instruments in our investment
portfolio. Accordingly, we do not believe there is any material market risk exposure with respect to derivative or other
financial instruments that would require disclosure under this item.

Our foreign currency hedging program uses either forward contracts or a Euro-denominated bank account to
manage the foreign currency exposures that exist as part of our ongoing business operations. Our foreign currency risk
management strategy is principally designed to mitigate the future potential financial impact of changes in the value of
transactions, anticipated transactions, and balances denominated in foreign currency resulting from changes in foreign
currency exchange rates. Our market risks associated with changes in foreign currency exchange rates are currently
limited to a Euro-denominated bank account as we had no forward contracts at December 31, 2021. Accordingly, we do
not believe there was any material market risk exposure with respect to foreign currency exposures that would require
disclosure under this item.

Item 8. Financial Statements and Supplementary Data

IMMUNOGEN, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 42) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2021 and 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31,

2021, 2020, and 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Consolidated Statements of Shareholders’ Equity (Deficit) for the Years Ended December 31, 2021,

2020, and 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, 2020, and 2019 . . . . . . . . . . 57
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

To the Shareholders and the Board of Directors of ImmunoGen, Inc.

Report of Independent Registered Public Accounting Firm

Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of ImmunoGen, Inc. (the Company) as of December 31,
2021 and 2020, the related consolidated statements of operations and comprehensive loss, shareholders' equity (deficit)
and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively
referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly,
in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its
operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with U.S.
generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) and our report dated February 28, 2022 expressed an unqualified opinion
thereon.

Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of
the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.

Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex
judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a
separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Clinical Trial Accrual

Description of the
Matter

As discussed in Note B to the consolidated financial statements, the Company estimates certain
clinical trial expenses due to a lag in receiving information from third parties. Moreover, payments
for these activities are based on the terms of the individual arrangements, which may differ from the
pattern of costs incurred. The Company maintained a clinical trial accrual of $15.6 million at
December 31, 2021 included as a component of other accrued liabilities.

Auditing the Company’s clinical trial accruals was especially subjective due to the management
judgment used to estimate the patient-related costs incurred but not yet invoiced. While the
Company’s estimates of patient-related costs incurred but not yet invoiced are primarily based on
information received from its vendors related to each clinical trial, the Company may need to use
assumptions such as estimates of patient enrollment, patient cycles incurred, clinical sites activated,
and other pass-through costs in determining its accrual. Additionally, due to the duration of the
clinical trials as well as the timing of invoices received from vendors, actual amounts incurred are
not typically known at the time the financial statements are issued.

How We
Addressed the
Matter in Our
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of internal
controls related to clinical trial accruals. For example, we tested management’s review controls over
the accuracy and completeness of the underlying data and the assumptions used in the Company’s
process for recording accrued patient-related costs.

Our audit procedures to test clinical trial accruals included, among others, testing the accuracy and
completeness of the underlying data used to estimate costs incurred but not yet invoiced as well as
evaluating and testing the assumptions used by management. We inspected the contracts and any
amendments to the contracts with third parties and assessed the pattern of historical invoicing activity
and the associated billing lags. We also corroborated the progress of clinical trials and other research
and development projects through discussion with the Company’s research and development
personnel that oversee the clinical trials. In addition, we inspected information obtained by the
Company directly from third-party vendors, which included the third-party vendors’ estimate of costs
incurred to date. We also performed analytical procedures over clinical trial accruals and compared
subsequent invoices received from third-party vendors to the amounts accrued.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2001.
Boston, Massachusetts
February 28, 2022

IMMUNOGEN, INC.

CONSOLIDATED BALANCE SHEETS

In thousands, except per share amounts

December 31, December 31,

2021

2020

ASSETS

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unbilled receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contract assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash royalty receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net of accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

478,750 $
4,467
2,345
3,000
4,115
7,322
499,999
4,663
12,392
8,711
525,765 $

293,856
35
11
—
22,451
7,901
324,254
5,760
14,072
10,986
355,072

LIABILITIES AND SHAREHOLDERS’ EQUITY

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Convertible 4.5% senior notes, net of deferred financing costs of $0 and $7,

18,434 $
5,469
23,077

9,538
4,620
29,320

respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

2,093

Current portion of liability related to the sale of future royalties, net of deferred

financing costs of $198 and $319, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of operating lease liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liability, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liability related to the sale of future royalties, net of current portion and deferred

financing costs of $381 and $584, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commitments and contingencies (Note I)
Shareholders’ equity:
Preferred stock, $.01 par value; authorized 5,000 shares; no shares issued and

6,077
3,537
44,351
100,945
47,717
15,244

34,967
1,306
200,179

44,357
3,146
29,249
122,323
80,860
18,651

41,082
2,586
265,502

outstanding as of each of December 31, 2021 and December 31, 2020 . . . . . . . . . . . . . .

—

Common stock, $.01 par value; authorized 300,000 shares; 220,361 and 194,998
shares issued and outstanding as of December 31, 2021 and December 31, 2020,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2,204
1,794,525
(1,471,143)
325,586
525,765 $

1,950
1,419,460
(1,331,840)
89,570
355,072

The accompanying notes are an integral part of the consolidated financial statements.

IMMUNOGEN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

In thousands, except per share amounts

Year Ended
December 31,
2020

2019

2021

Revenues:

Non-cash royalty revenue related to the sale of future royalties . . . . . . . $
License and milestone fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46,808 $
22,650
398
69,856

68,529 $
63,742
28
132,299

47,415
34,788
68
82,271

Operating expenses:

Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-cash interest expense on liability related to the sale of future

151,117
43,812
—
194,929
(125,073)
51

114,592
38,600
1,487
154,679
(22,380)
729

114,522
38,489
21,433
174,444
(92,173)
4,424

royalties and convertible senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense on convertible senior notes . . . . . . . . . . . . . . . . . . . . . . . . .
Other (expense) income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Basic and diluted net loss per common share . . . . . . . . . . . . . . . . . . . . . . . . $
Basic and diluted weighted-average common shares outstanding . . . . . . . .
Total comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

(13,103)
(47)
(1,131)
(139,303) $
(0.68) $
206,147
(139,303) $

(23,107)
(95)
481

(16,879)
(95)
590
(44,372) $ (104,133)
(0.25) $
(0.70)
148,311
176,153
(44,372) $ (104,133)

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

IMMUNOGEN, INC.

In thousands

Common Stock
Shares Amount

Additional
Paid-In
Capital

Total

Deficit

Accumulated Shareholders’
Equity (Deficit)
10,972
(104,133)

Balance at December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,400 $ 1,494 $ 1,192,813 $ (1,183,335) $
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock pursuant to the exercise of stock options and

(104,133)

—

2,873
—
13,830
337
(76,121)
(44,372)

1,471
194,271
—
—
13,978
343
89,570
(139,303)

3,769
154,030
199,045
1,000
—
—
16,794
681
325,586

employee stock purchase plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock award forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock option and restricted stock compensation expense . . . . . . . . . . . . . . . . .
Directors’ deferred share unit compensation . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,136 $ 1,501 $ 1,209,846 $ (1,287,468) $
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock pursuant to the exercise of stock options and

2,862
4
13,830
337

1,150
(414)
—
—

11
(4)
—
—

—
—
—
—

(44,372)

—

employee stock purchase plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock, net of issuance costs . . . . . . . . . . . . . . . . . . . . . .
Restricted stock units vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock award forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock option and restricted stock compensation expense . . . . . . . . . . . . . . . . .
Directors’ deferred share unit compensation . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194,998 $ 1,950 $ 1,419,460 $ (1,331,840) $
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock pursuant to the exercise of stock options and

1,466
193,826
(4)
5
13,978
343

458
44,496
395
(487)
—
—

5
445
4
(5)
—
—

—
—
—
—
—
—

(139,303)

employee stock purchase plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Issuance of common stock, net of issuance costs . . . . . . . . . . . . . . . . . . . . . .
Issuance of pre-funded warrants, net of issuance costs . . . . . . . . . . . . . . . . . .
Conversion of convertible senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock units vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock award forfeitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock option and restricted stock compensation expense . . . . . . . . . . . . . . . . .
Directors’ deferred share unit compensation . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

998
24,181
—
239
2
(57)
—
—

10
242
—
3
—
(1)
—
—

3,759
153,788
199,045
997
—
1
16,794
681

—
—
—

—
—
—
—

220,361 $ 2,204 $ 1,794,525 $ (1,471,143) $

The accompanying notes are an integral part of the consolidated financial statements.

IMMUNOGEN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands

Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (139,303)
Adjustments to reconcile net loss to net cash used for operating activities:

(44,372) $ (104,133)

Year Ended
December 31,
2020

2019

2021

(39,155)

(68,529)

(47,415)

Non-cash royalty revenue related to sale of future royalties . . . . . . . . . . .
Non-cash interest expense on liability related to sale of future

royalties and convertible senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Gain) loss on sale/disposal of fixed assets and impairment charges . . . .
Operating lease right-of-use asset impairment . . . . . . . . . . . . . . . . . . . . . .
Stock and deferred share unit compensation . . . . . . . . . . . . . . . . . . . . . . .
Change in operating assets and liabilities:

13,103
2,017
—
—
17,475

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unbilled receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contract asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used for operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,432)
(2,334)
(3,000)
579
1,680
2,275
9,148
849
(7,261)
(18,041)
(3,016)
(169,416)

Cash flows from investing activities:

Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash (used for) provided by investing activities . . . . . . . . . . . . . . .

(1,434)
—
(1,434)

Cash flows from financing activities:

Payments upon settlement of convertible senior notes . . . . . . . . . . . . . .
Proceeds from issuance of common stock under stock plans . . . . . . . . .
Proceeds from warrant issuance, net of $391 of transaction costs . . . . .
Proceeds from common stock issuance, net of $373 and $701 of

(1,100)
3,769
199,045

23,107
2,101
(691)
—
14,321

7,465
990
3,631
(2,476)
1,515
(7,202)
(819)
(4,100)
16,734
(17,323)
(2,972)
(78,620)

(917)
1,426
509

—
1,471
—

16,879
4,028
1,689
694
14,167

(5,799)
(384)
(3,131)
(963)
1,331
(75)
(1,045)
(2,189)
(6,146)
46,630
(2,505)
(88,367)

(2,845)
2,312
(533)

—
2,873
—

154,030
transaction costs, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
355,744
Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . .
184,894
Net change in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . . . .
293,856
Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 478,750
Supplemental cash flow information:

194,271
195,742
117,631
176,225

—
2,873
(86,027)
262,252
$ 293,856 $ 176,225

Cash paid during the year for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

95 $

The accompanying notes are an integral part of the consolidated financial statements.

IMMUNOGEN, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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. The Company has generally incurred operating losses and negative cash flows
from operations since inception, incurred a net loss of $139.3 million during the year ended December 31, 2021, and had
an accumulated deficit of approximately $1.5 billion as of December 31, 2021. The Company has primarily funded these
losses through payments received from its collaborations and equity, convertible debt, and other financings. To date, the
Company has had no revenues from commercial sales of its own products and management expects to continue to incur
substantial operating losses for at least the near term as the Company incurs significant operating expenses related to
research and development and potential commercialization of its portfolio.

At December 31, 2021, the Company had $478.8 million of cash and cash equivalents on hand. The Company

anticipates that its current capital resources will enable it to meet its operational expenses and capital expenditures for
more than twelve months after these financial statements are issued. The Company may raise additional funds through
equity, debt, or other financings or generate revenues from collaborators through a combination of upfront license
payments, milestone payments, royalty payments, and research funding. There can be no assurance that the Company
will be able to obtain additional equity, debt, or other financing or generate revenues from collaborators on terms
acceptable to the Company or at all. The failure of the Company to obtain sufficient funds on acceptable terms when
needed could have a material adverse effect on the Company’s business, results of operations, and financial condition
and require the Company to defer or limit some or all of its research, development, and/or clinical projects.

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, complexities associated with managing collaboration
arrangements, third-party reimbursements, and compliance with governmental regulations.

Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries,
ImmunoGen Securities Corp., ImmunoGen Europe Limited, ImmunoGen BioPharma (Ireland) Limited, and Hurricane,
LLC. All intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the

United States (U.S.) requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Subsequent Events

The Company has evaluated all events or transactions that occurred after December 31, 2021 up through the
date the Company issued these financial statements. On February 14, 2022, the Company and Eli Lilly and Company
(“Lilly”) entered into a license agreement, pursuant to which the Company granted Lilly worldwide exclusive rights to
research, develop, and commercialize ADCs based on the Company’s novel camptothecin technology. Under the terms
of the license agreement, the Company is entitled to receive an upfront payment of $13 million, reflecting initial targets
selected by Lilly, and up to an additional $32.5 million if Lilly selects the maximum number of additional targets over
the four year-period following the effective date of the license agreement. In addition, Lilly will be obligated to pay the
Company, on a target-by-target basis, development, regulatory, and commercial milestones. In total, the Company could
earn up to $1.7 billion in target selection fees and development, regulatory, and commercial milestones if all targets are
selected and all milestones are realized. The Company is also eligible to receive tiered royalties, on a product-by-product
basis, as a percentage of worldwide annual net sales by Lilly, based on certain net sales thresholds. The Company did not
have any other material subsequent events.

Revenue Recognition

The Company enters into licensing and development agreements with collaborators for the development of

ADCs. The terms of these agreements contain multiple promised goods and services which may include (i) licenses, or
options to obtain licenses, to the Company’s ADC technology, (ii) rights to future technological improvements, (iii)
technology transfer services and other activities to be performed on behalf of the collaborative partner, and (iv) delivery
of cytotoxic agents and/or the manufacture of preclinical and clinical materials for the collaborative partner. Payments to
the Company under these agreements may include upfront fees, option fees, exercise fees, payments for services,
payments for preclinical or clinical materials, payments based upon the achievement of certain milestones, and royalties
on product sales. The Company follows the provisions of ASC 606, Revenue from Contracts with Customers, in
accounting for these agreements.

Revenue is recognized when a customer obtains control of promised goods or services in an amount that
reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the
appropriate amount of revenue to be recognized as it fulfills its obligations under the agreements, the Company performs
the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether
the promised goods or services are performance obligations, including whether they are distinct in the context of the
contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of
the transaction price to the performance obligations; and (v) recognition of revenue when or as the Company satisfies
each performance obligation.

The Company only applies the five-step model to contracts when it is probable that the Company will collect

the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. At contract
inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or
services promised within each contract and determines those that are performance obligations based on its assessment of
whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the
transaction price that is allocated to the respective performance obligation when or as the performance obligation is
satisfied.

The Company exercises judgment in assessing those promised goods and services that are distinct and thus

representative of performance obligations. To the extent the Company identifies multiple performance obligations in a
contract, the Company must develop assumptions that require judgment to determine the estimated standalone selling
price for each performance obligation in order to allocate the transaction price among the identified performance
obligations. These judgments and assumptions are discussed in further detail below.

At December 31, 2021, the Company had the following types of material agreements with the parties identified

below:

• Development and commercialization licenses, which provide the counterparty with the right to use the
Company’s ADC technology and/or certain other intellectual property to develop and commercialize
compounds to a specified antigen target:

Bayer (one exclusive single-target license)

CytomX (two exclusive single-target licenses)

Debiopharm (one exclusive single-compound license)

Fusion Pharmaceuticals (one exclusive single-target license)

Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. (one territory-specific exclusive single-
compound license)

Novartis (five exclusive single-target licenses)

Oxford BioTherapeutics/Menarini (one exclusive single-target license sublicensed from Amgen)

Roche, through its Genentech unit (five exclusive single-target licenses)

Viridian (one exclusive single-target license)

• Collaboration and license agreement to co-develop and co-commercialize a specified anticancer compound

on established terms:

MacroGenics

During the year ended December 31, 2020, pursuant to notices received, the exclusive development and
commercialization licenses granted to each of Biotest and Takeda and the collaboration and option agreement with Jazz
were terminated.

There are no performance, cancellation, termination, or refund provisions in any of the arrangements that

contain material financial consequences to the Company.

Development and Commercialization Licenses

The obligations under a development and commercialization license agreement generally include the license to
the Company’s ADC technology with respect to a specified antigen target or compound and may also include obligations
related to rights to future technological improvements and other activities to be performed on behalf of the collaborative
partner.

Generally, development and commercialization licenses contain non-refundable terms for payments and,

depending on the terms of the agreement, provide that the Company will earn payments upon the achievement of certain
milestones and royalty payments, generally until the later of the last applicable patent expiration or a fixed period of
years after product launch. Royalty rates may vary over the royalty term depending on the Company’s intellectual
property rights and/or the presence of comparable competing products. In the case of Debiopharm, no royalties will be
received. In certain instances, the Company may also provide cytotoxic agents and/or clinical materials or other services
in addition to the development and commercialization licenses. For example, the Company may provide technology
transfer services in connection with the out-licensing of product candidates initially developed by the Company and may
also provide technical assistance and share any technology improvements with its collaborators during the term of the
collaboration agreements. The Company does not directly control when or whether any collaborator will request certain
services, achieve milestones, or become liable for royalty payments.

In determining the performance obligations for these arrangements, management evaluates whether the license
is distinct and has significant standalone functionality either alone or with other readily available resources based on the
consideration of the relevant facts and circumstances for each arrangement. Factors considered in this determination
include the research capabilities of the partner and the availability of ADC technology research expertise and ADC
manufacturing capabilities in the general marketplace and whether technological improvements are required for the
continued functionality of the license. If the license to the Company’s intellectual property is determined to be distinct,
the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is
transferred to the customer and the customer is able to use and benefit from the license. If the license is not distinct, the
license is combined with other goods or services into a single performance obligation and revenue is recognized over
time.

The Company estimates the standalone selling prices of the license and all other performance obligations based
on market conditions, similar arrangements entered into by third parties, and entity-specific factors such as the terms of
the Company’s previous collaborative agreements, recent preclinical and clinical testing results of therapeutic products
that use the Company’s ADC technology, the Company’s pricing practices and pricing objectives, the likelihood that
technological improvements will be made, and, if made, will be used by the Company’s collaborators, and the nature of
the other services to be performed on behalf of its collaborators and market rates for similar services.

The Company recognizes revenue related to technology transfer activities and other services as the services are

performed. The Company is generally compensated for these activities at negotiated rates that are consistent with what
other third parties would charge. The Company records amounts recognized for services performed as a component of
research and development support revenue.

The Company may also provide cytotoxic agents and/or preclinical and clinical materials (drug substance/drug

product) to its collaborators at negotiated prices generally consistent with what other third parties would charge. The
Company recognizes revenue on cytotoxic agents and/or preclinical and clinical materials when control transfers to the
collaborator as a component of research and development support revenue.

The Company recognizes revenue related to the rights to future technological improvements over the estimated

term of the applicable license.

The Company’s development and commercialization license agreements have milestone payments which for

reporting purposes are aggregated into two categories: (i) development and regulatory milestones, and (ii) sales
milestones. Development milestones are typically payable when a product candidate initiates or advances into different
clinical trial phases. Regulatory milestones are typically payable upon submission for marketing approval with the FDA

or other countries’ regulatory authorities or on receipt of actual marketing approvals for the compound or for additional
indications. Sales milestones are typically payable when annual sales reach certain levels.

At the inception of each arrangement, the Company evaluates any development and regulatory milestone

payments to determine whether the milestone is considered probable of being reached and estimates the amount to be
included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal
would not occur, the associated milestone value is included in the transaction price to be allocated; otherwise, such
amounts are considered constrained and excluded from the transaction price. As part of its evaluation of the constraint,
the Company considers numerous factors, including whether the achievement of the milestone is outside the control of
the Company and contingent upon the future success of clinical trials, the collaborator’s efforts, or the receipt of
regulatory approval. At the end of each subsequent reporting period, the Company re-evaluates the probability of
achievement of such development or regulatory milestones and any related constraint, and if necessary, adjusts the
estimate of the transaction price. In addition, the Company evaluates whether the achievement of each milestone
specifically relates to the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service
within a performance obligation. If the achievement of a milestone is considered a direct result of the Company’s efforts
to satisfy a performance obligation or transfer a distinct good or service and the receipt of the payment is based upon the
achievement of the milestone, the associated milestone value is allocated to that distinct good or service. If the milestone
payment is not specifically related to the Company’s effort to satisfy a performance obligation or transfer a distinct good
or service, the amount is allocated to all performance obligations using the relative standalone selling price method.
Amounts allocated to a satisfied performance obligation are recognized as revenue, or as a reduction of revenue, in the
period in which the transaction price changes.

For development and commercialization license agreements that include sales-based royalties, including
milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the
royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the
performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied) in
accordance with the royalty recognition constraint. Under the Company’s development and commercialization license
agreements, except for the Debiopharm license, the Company receives royalty payments based upon its licensees’ net
sales of covered products. Generally, under the development and commercialization agreements, the Company receives
royalty reports and payments from its licensees approximately one quarter in arrears. The Company estimates the
amount of royalty revenue to be recognized based on historical and forecasted sales and/or sales information from its
licensees if available.

Collaboration and Option Agreements/Right-to-Test Agreements

The Company’s right-to-test agreements provide collaborators the right to test the Company’s ADC technology

for a defined period of time through a research, or right-to-test, license. Under both right-to-test agreements and
collaboration and option agreements, collaborators may (a) “take” options, for a defined period of time, to specified
targets and (b) upon exercise of those options, secure or “take” licenses to develop and commercialize products for the
specified targets on established terms. Under these agreements, fees may be due to the Company (i) at the inception of
the arrangement (referred to as “upfront” fees or payments), (ii) upon the opt-in to acquire a development and
commercialization license(s) (referred to as exercise fees or payments earned, if any, when the development and
commercialization license is “taken”), (iii) after providing services at the collaborator’s request at negotiated prices,
which are generally consistent with what other third parties would charge, or (iv) upon some combination of all of these
fees.

The accounting for collaboration and option agreements and right-to-test agreements is dependent on the nature

of the options granted to the collaborative partner. Options are considered distinct performance obligations if they
provide a collaborator with a material right. Factors that are considered in evaluating whether options convey a material
right include the overall objective of the arrangement, the benefit the collaborator might obtain from the agreement
without exercising the options, the cost to exercise the options relative to the fair value of the licenses, and the additional
financial commitments or economic penalties imposed on the collaborator as a result of exercising the options.

If the Company concludes that an option provides the customer a material right, and therefore is a separate
performance obligation, the Company then determines the estimated standalone selling price of the option using the
following inputs: (a) estimated fair value of the license underlying each option, (b) the amount the partner would pay to
exercise the option to obtain the license, and (c) probability of exercise.

The Company does not control when or if any collaborator will exercise its options for development and
commercialization licenses. As a result, the Company cannot predict when or if it will recognize revenues in connection
with any of the foregoing.

Upfront payments on development and commercialization licenses may be recognized upon delivery of the

license if facts and circumstances dictate that the license is distinct from the other promised goods and services.

In determining whether a collaboration and option agreement is within the scope of ASC 808, Collaborative

Arrangements, management evaluates the level of involvement of both companies in the development and
commercialization of the products to determine if both parties are active participants and if both parties are exposed to
risks and rewards dependent on the commercial success of the licensed products. If the agreement is determined to be
within the scope of ASC 808 and not representative of a vendor-customer relationship, the Company segregates the
research and development activities and the related cost sharing arrangement. Payments made by the Company for such
activities are recorded as research and development expense and reimbursements received from the partner are
recognized as an offset to research and development expense.

Transaction Price Allocated to Remaining Performance Obligations

Deferred revenue under ASC 606 represents the portion of the transaction price received under various

contracts for which work has not been performed (or has been partially performed) and includes unexercised contract
options that are considered material rights. As of December 31, 2021, the aggregate amount of the transaction price
allocated to remaining performance obligations comprising deferred revenue was $92.1 million. The Company expects
to recognize revenue on approximately 48%, 41%, and 11% of the remaining performance obligations over the next 12
months, 13 to 60 months, and 61 to 120 months, respectively, however, it does not control when or if any collaborator
will terminate existing development and commercialization licenses.

Contract Balances from Contracts with Customers

The following tables present changes in the Company’s contract assets and contract liabilities during the years

ended December 31, 2021 and 2020 (in thousands):

Year ended December 31, 2021
Contract asset . . . . . . . . . . . . . . . . . $
Contract liabilities (deferred

Balance at
December 31, 2020

Additions

Deductions

— $

5,500 $

(2,500) $

Impact of Netting December 31, 2021
3,000

— $

Balance at

revenue) . . . . . . . . . . . . . . . . . . . . $

110,109 $

4,753 $

(22,794) $

— $

92,068

Year ended December 31, 2020
Contract asset . . . . . . . . . . . . . . . . . $
Contract liabilities (deferred

Balance at
December 31, 2019

Additions

Deductions

3,631 $

— $

(8,000) $

Balance at

Impact of Netting December 31, 2020
—

4,369 $

revenue) . . . . . . . . . . . . . . . . . . . . $

127,432 $

42,050 $

(63,742) $

4,369 $

110,109

During the years ended December 31, 2021, 2020, and 2019 the Company recognized the following revenues as

a result of changes in contract asset and contract liability balances in the respective periods (in thousands):

2021

Year Ended
December 31,
2020

2019

Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning

of the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Performance obligations satisfied in previous periods . . . . . .

$
$

22,765 $
5,500 $

61,872 $
— $

14,817
12,672

Pursuant to the Company’s license agreement executed with Hangzhou Zhongmei Huadong Pharmaceutical

Co., Ltd. (Huadong), upon delivery of clinical materials in 2021, the Company recorded $14.6 million of the $40.0
million upfront payment received and deferred in 2020 as license and milestone fee revenue. Additionally, in
December 2021, the Company received a $5.0 million payment for a development milestone achieved pursuant to its
agreement with Huadong, of which $1.8 million was recorded as license and milestone fee revenue in 2021 and $3.2
million was deferred and will be recorded as revenue, along with the remaining $25.4 million from the upfront license
fee, upon delivery of clinical material in 2022. Also, during 2021, pursuant to its license agreement with Viridian, the
Company recorded $2.5 million as license and milestone fee revenue related to a development milestone achieved in
October 2021 and a contract asset of $3.0 million for a second probable development milestone. The Company also
recorded $0.2 million as license and milestone fee revenue for delivery of certain materials to Viridian that had been
previously

deferred, $0.3 million of license and milestone fee revenue related to numerous collaborators’ rights to technological
improvements that had been previously deferred, and recorded $7.7 million of previously deferred non-cash royalty
revenue related to the sale of rights to KADCYLA royalties, further details of which can be found in Note E, “Liability
Related to Sale of Future Royalties.” Lastly, pursuant to a research agreement, the Company received a $1.6 million
upfront option fee that is included in deferred revenue at December 31, 2021.

During 2020, the Company recognized $60.5 million of previously deferred license revenue upon Jazz’s opt-out

of its right to the last remaining license under the agreement and $3.2 million of upfront fees previously received from
other partners, of which $1.4 million was included in contract liabilities at the beginning of 2020. As noted above, a
$40.0 million upfront payment received in 2020 pursuant to a license agreement executed with Huadong was recorded as
deferred revenue and none of this amount was recognized as revenue during 2020. Additionally, a contract asset of $3.6
million, net of $4.4 million in related contract liabilities, was recorded for two probable milestones in 2019 pursuant to
license agreements with CytomX and Novartis, which were subsequently achieved and paid during 2020.

The Company recorded the following during the year ended December 31, 2019: (i) license and milestone fee

revenue of $7.7 million for probable development milestones pursuant to license agreements with CytomX and Novartis,
with another $0.3 million deferred which represents the amount allocated to future rights to technological improvements;
a $3.6 million contract asset was recorded in December 2019 related to these probable milestones, net of a $4.4 million
reduction in related contract liabilities; (ii) a $5.0 million regulatory milestone payment earned under its license
agreement with Genentech, a member of Roche; the full amount of the milestone was recognized as revenue in the
period as the amount allocated to future rights to technological improvements was not material; (iii) $14.5 million of
previously deferred license revenue recognized upon the opt-out of the right to execute a license by Jazz; (iv) $65.2
million was recorded as deferred revenue as a result of a sale of the Company’s residual rights to receive royalty
payments on commercial sales of KADCYLA ® (ado-trastuzumab emtansine) as discussed in Note F; and (v) $0.3
million of revenue previously deferred related to numerous collaborators’ rights to technological improvements.
Additionally, $7.3 million of a $7.5 million upfront payment invoiced to CytomX pursuant to a license agreement
executed in December 2019 was recorded as license and milestone fee revenue upon delivery of the license and $0.2
million was deferred until delivery of certain materials.

The timing of revenue recognition, billings, and cash collections results in billed receivables, unbilled
receivables, contract assets, and contract liabilities on the consolidated balance sheets. When consideration is received,
or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer
under the terms of a contract, a contract liability is recorded (under the caption deferred revenue). Contract liabilities are
recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition
criteria have been met.

Financial Instruments and Concentration of Credit Risk

Cash and cash equivalents are primarily maintained with three financial institutions in the U.S. Deposits with

banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon
demand and, therefore, bear minimal risk. The Company’s cash equivalents consist of money market funds with
underlying investments primarily being U.S. Government-issued securities and high quality, short-term commercial
paper. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of
cash, cash equivalents, and marketable securities. The Company held no marketable securities as of December 31, 2021
or 2020. The Company’s investment policy, approved by the Board of Directors, limits the amount it may invest in any
one type of investment, thereby reducing credit risk concentrations.

Cash and Cash Equivalents

All highly liquid financial instruments with maturities of three months or less when purchased are considered

cash equivalents. As of December 31, 2021 and 2020, the Company held $478.8 million and $293.9 million,
respectively, in cash and money market funds consisting principally of U.S. Government-issued securities and high
quality, short-term commercial paper which were classified as cash and cash equivalents.

Non-cash Investing Activities

The Company had $0.2 million and $0.7 million of accrued capital expenditures as of December 31, 2021 and

2020, respectively, which have been treated as a non-cash investing activity and accordingly, not reflected in the
consolidated statement of cash flows.

Fair Value of Financial Instruments

ASC 820, Fair Value Measurement, defines fair value, establishes a framework for measuring fair value in
accordance with accounting principles generally accepted in the U.S., and provides for disclosures about fair value
measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to
transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly
transaction between market participants on the measurement date. Valuation techniques used to measure fair value must
maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a hierarchy
to measure fair value which is based on three levels of inputs, of which the first two are considered observable and the
last unobservable, as follows:

• Level 1—Quoted prices in active markets for identical assets or liabilities.
• Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices

for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are
observable or can be corroborated by observable market data for substantially the full term of the assets or
liabilities.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to

the fair value of the assets or liabilities.

As of December 31, 2021 and 2020, the Company held certain assets that are required to be measured at fair
value on a recurring basis. The following tables represent the fair value hierarchy for the Company’s financial assets
measured at fair value on a recurring basis as of each date (in thousands):

Cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 460,298 $

460,298 $

— $

—

Identical Assets Observable Inputs

Inputs

Total

(Level 1)

(Level 2)

(Level 3)

Fair Value Measurements at December 31, 2021
Quoted Prices in
Active Markets for

Significant Other Unobservable

Significant

Fair Value Measurements at December 31, 2020
Quoted Prices in
Active Markets for

Significant Other Unobservable

Significant

Identical Assets Observable Inputs

Inputs

Total

(Level 1)

(Level 2)

(Level 3)

Cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 194,525 $

194,525 $

— $

—

The fair value of the Company’s cash equivalents is based primarily on quoted prices from active markets.

The carrying amounts reflected in the consolidated balance sheets for accounts receivable, unbilled receivable,
contract assets, non-cash royalty receivable, prepaid and other current assets, accounts payable, accrued compensation,
and other accrued liabilities approximate fair value due to their short-term nature. The gross carrying amount and
estimated fair value of the convertible 4.5% senior notes was $2.1 million and $4.3 million, respectively, as of
December 31, 2020. The fair value of the convertible notes was influenced by interest rates, the Company’s stock price
and stock price volatility, and by prices observed in trading activity for the convertible notes. However, because there
have been no trades involving the convertible notes since September 2019, the fair value as of December 31, 2020 uses
Level 3 inputs. During 2021, $1.0 million of outstanding convertible 4.5% senior notes converted into 238,777 shares of
the Company’s common stock, par value $0.01 per share (common stock), with the remaining $1.1 million of
convertible 4.5% senior notes paid in cash upon maturity on July 1, 2021.

Unbilled Receivable

Unbilled receivable primarily represents research funding earned based on actual resources utilized and external

expenses incurred under certain of the Company’s collaborator agreements.

Clinical Trial Accruals

Clinical trial expenses are a significant component of research and development expenses, and the Company

outsources a significant portion of these activities to third parties. Third-party clinical trial expenses include investigator
fees, site costs (patient cost), clinical research organization costs, and costs for central laboratory testing and data
management. The accrual for site and patient costs includes inputs such as estimates of patient enrollment, patient cycles

incurred, clinical site activations, and other pass-through costs. These inputs are required to be estimated due to a lag in
receiving the actual clinical information from third parties. Payments for these activities are based on the terms of the
individual arrangements, which may differ from the pattern of costs incurred. Clinical trial costs are reflected on the
consolidated balance sheets as prepaid assets (to the extent payments exceed costs incurred) or accrued clinical trial costs
(to the extent costs incurred exceed payments). These third-party agreements are generally cancelable, and related costs
are recorded as research and development expenses as incurred. Non-refundable advance clinical payments for goods or
services that will be used or rendered for future R&D activities are recorded as a prepaid asset and recognized as
expense as the related goods are delivered or the related services are performed. The Company also records accruals for
estimated ongoing clinical research and development costs. When evaluating the adequacy of the accrued liabilities, the
Company analyzes progress of the studies, including the phase or completion of events, invoices received, and
contracted costs. Significant judgments and estimates may be made in determining the accrued balances at the end of any
reporting period. Actual results could differ from the estimates made by the Company. The historical clinical accrual
estimates made by the Company have not been materially different from the actual costs.

Leases

The Company determines if an arrangement is a lease at inception. Operating leases include right-of-use (ROU)

assets and operating lease liabilities (current and non-current), which are recorded in the Company’s consolidated
balance sheets. Single payment capital leases for equipment that are considered finance leases are included in property
and equipment in the Company’s consolidated balance sheets. As the single payment obligations have all been made,
there is no related liability recorded.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities
represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and
liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The
Company uses the implicit rate when readily determinable. As a number of the Company’s leases do not provide an
implicit rate, the Company uses an incremental borrowing rate applicable to the Company based on the information
available at the commencement date in determining the present value of lease payments. As the Company has no
existing or proposed collateralized borrowing arrangements, to determine a reasonable incremental borrowing rate, the
Company considers collateral assumptions, the lease term, the Company’s current credit risk profile, and rates for
existing borrowing arrangements for comparable peer companies. The Company accounts for the lease and fixed non-
lease components as a single lease component. The Company’s lease terms may include options to extend or terminate
the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating lease
payments is recognized on a straight-line basis over the lease term.

Other Accrued Liabilities

Other accrued liabilities consisted of the following at December 31, 2021 and 2020 (in thousands):

Accrued contract payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accrued clinical trial costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued professional services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued employee benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued public reporting charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

2021

5,558 $
15,556
839
40
309
775
23,077 $

2020
15,576
11,401
1,200
39
319
785
29,320

December 31, December 31,

Accrued contract payments included in the table above primarily relate to external manufacturing, regulatory,

and quality-related services. The decrease in the balance as of December 31, 2021 compared to prior year was driven by
timing of external manufacturing expenses.

Research and Development Expenses

The Company’s research and development expenses are charged to expense as incurred and relate to
(i) research to evaluate new targets and to develop and evaluate new antibodies, linkers, and cytotoxic agents,
(ii) preclinical testing of its own and, in certain instances, its collaborators’ product candidates, and the cost of its own
clinical trials, (iii) development related to clinical and commercial manufacturing processes, (iv) regulatory activities,
and (v) external manufacturing operations. Payments made by the Company in advance for research and development

services not yet provided and/or materials not yet delivered and accepted are recorded as prepaid expenses and
are included in the accompanying consolidated balance sheets as prepaid and other current assets.

Income Taxes

The Company uses the liability method to account for income taxes. Deferred tax assets and liabilities

are determined based on differences between the financial reporting and income tax basis of assets and
liabilities, as well as net operating loss carry forwards and tax credits and are measured using the enacted tax
rates and laws that will be in effect when the differences reverse. A valuation allowance against net deferred tax
assets is recorded if, based on the available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized.

Property and Equipment

Property and equipment are stated at cost. The Company provides for depreciation based upon

expected useful lives using the straight-line method over the following estimated useful lives:

Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . 5 years
Computer hardware and software . . . . . . . . . . . . . . . . . . 3 years
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . Shorter of remaining lease term or 7 years

Equipment under capital leases is amortized over the lives of the respective leases or the estimated useful lives

of the assets, whichever is shorter, and included in depreciation expense.

Maintenance and repairs are charged to expense as incurred. Upon retirement or sale, the cost of disposed assets
and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the
statement of operations. The Company recorded net gains (losses) of $0.7 million and $(1.7) million related to
impairment charges and the sale/disposal of certain furniture and equipment during the years ended December 31, 2020,
and 2019, respectively. There were no similar gains (losses) recorded during the year ended December 31, 2021.

Impairment of Long-Lived Assets

The Company continually evaluates whether events or circumstances have occurred that indicate that the

estimated remaining useful life of its long-lived assets may warrant revision or that the carrying value of these assets
may be impaired if impairment indicators are present. The Company evaluates the realizability of its long-lived assets
based on cash flow expectations for the related asset. Any write-downs to fair value are treated as permanent reductions
in the carrying amount of the assets. Accordingly, during the year ended December 31, 2019, the Company recorded a
$2.5 million asset impairment charge resulting from restructuring activities, the details of which are further discussed in
Note I. Based on this evaluation, except for the impairment recognized during 2019, the Company believes that none of
the Company’s remaining long-lived assets were impaired.

Common Stock Warrants
The Company accounts for common stock warrants as either equity-classified or liability-classified instruments

based on an assessment of the warrant’s specific terms and applicable authoritative guidance included in Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities
from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the
warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a
liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC
815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders
could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other
conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the
time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to
be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do
not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the
date of issuance and remeasured each balance sheet date thereafter. Changes in the estimated fair value of the liability-
classified warrants are recognized as a non-cash gain or loss in the accompanying consolidated statements of operations
and comprehensive loss.

Computation of Net Loss per Common Share

Basic and diluted net loss per share is calculated based upon the weighted average number of shares of common

stock outstanding during the period. Shares of the Company’s common stock underlying pre-funded warrants are
included in the calculation of basic and diluted earnings per share. During periods of income, participating securities are
allocated a proportional share of income determined by dividing total weighted average participating securities by the
sum of the total weighted average common shares and participating securities (the “two-class method”). Shares of the
Company’s restricted stock participate in any dividends that may be declared by the Company and are therefore
considered to be participating securities. Participating securities have the effect of diluting both basic and diluted
earnings per share during periods of income. During periods of loss, no loss is allocated to participating securities since
they have no contractual obligation to share in the losses of the Company. Diluted loss per share is computed after giving
consideration to the dilutive effect of stock options, convertible notes, and restricted stock that are outstanding during the
period, except where such non-participating securities would be anti-dilutive.

The Company’s common stock equivalents, as calculated in accordance with the treasury-stock method for

options and unvested restricted stock and the if-converted method for the convertible notes, are shown in the following
table (in thousands):

Options outstanding to purchase common stock, shares issuable

under the employee stock purchase plan, and unvested
restricted stock/units at end of period . . . . . . . . . . . . . . . . . . . . . . .

Common stock equivalents under treasury stock method for

options, shares issuable under the employee stock purchase
plan, and unvested restricted stock/units . . . . . . . . . . . . . . . . . . . .

Shares issuable upon conversion of convertible notes at end of

period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Common stock equivalents under if-converted method for

convertible notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Year Ended December 31,

2021

2020

2019

21,296

18,459

14,815

2,546

1,301

1,020

—

501

The Company’s common stock equivalents have not been included in the net loss per share calculation because

their effect is anti-dilutive due to the Company’s net loss position.

Stock-based Compensation

As of December 31, 2021, the Company is authorized to grant future awards under three employee share-based
compensation plans, which are the ImmunoGen, Inc. 2018 Employee, Director and Consultant Equity Incentive Plan, or
the 2018 Plan, the Employee Stock Purchase Plan, or ESPP, and the ImmunoGen Inducement Equity Incentive Plan, or
the Inducement Plan. At the annual meeting of shareholders on June 16, 2021, the 2018 Plan was amended to provide for
the issuance of stock grants, the grant of options, and the grant of stock-based awards for up to 6,600,000 shares of the
Company’s common stock, as well as up to 22,392,986 shares of common stock, which represent the number of shares
of common stock remaining under the 2018 Plan as of March 31, 2021, and shares of the Company’s common stock
represented by awards granted under the ImmunoGen, Inc. 2016 and 2006 Employee, Director and Consultant Equity
Incentive Plans, that may forfeit, expire, or cancel without delivery of shares of common stock or which resulted in the
forfeiture of shares of common stock back to the Company on or after March 31, 2021. The Inducement Plan was
approved by the Board of Directors in December 2019, and pursuant to subsequent amendments, provided for the
issuance of non-qualified option grants for up to 3,500,000 shares of the Company’s common stock as of December 31,
2021. Options awarded under the two plans are granted with an exercise price equal to the market price of the
Company’s stock at the date of grant. Options vest at various periods of up to four years and may be exercised within ten
years of the date of grant.

The stock-based awards are accounted for under ASC 718, “Compensation—Stock Compensation.” Pursuant to

ASC 718, the estimated grant date fair value of awards is charged to the statement of operations over the requisite
service period, which is the vesting period. The fair value of each stock option is estimated on the date of grant using the
Black-Scholes option-pricing model with the weighted-average assumptions noted in the following table. As the
Company has not paid dividends since inception, nor does it expect to pay any dividends for the foreseeable future, the
expected dividend yield assumption is zero. Expected volatility is based exclusively on historical volatility of the
Company’s stock. The expected term of stock options granted is based exclusively on historical data and represents the
period of time that stock options granted are expected to be outstanding. The expected term is calculated for and applied

to one group of stock options as the Company does not expect substantially different exercise or post-vesting termination
behavior amongst its employee population. The risk-free rate of the stock options is based on the U.S. Treasury rate in
effect at the time of grant for the expected term of the stock options.

Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected life (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021
None
84.67%
0.80%
6.0

Year Ended
December 31,

2020
None
85.07%
1.21%
6.0

2019
None
76.67%
2.20%
6.0

Using the Black-Scholes option-pricing model, the weighted-average grant date fair values of options granted

during the years ended December 31, 2021, 2020, and 2019, were $5.07, $3.28, and $2.81 per share, respectively.

A summary of option activity under the option plans for 2021 is presented below (in thousands, except

weighted-average data):

Number
of Stock
Options

Weighted-
Average
Exercise
Price

Weighted-
Average
Remaining
Life in Yrs.

Aggregate
Intrinsic
Value

Outstanding at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited/Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Outstanding at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . .
Exercisable at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . .
Vested and expected to vest at December 31, 2021 . . . . . . . . . . .

18,398 $
5,324
(872)
(1,631)
21,219 $
9,619 $
21,219 $

6.10
7.15
3.51
8.59
6.28
7.10
6.28

7.34 $ 41,425
5.87 $ 19,140
7.34 $ 41,425

In 2020, the Company issued 2.6 million performance-based stock options to certain employees, all of which
remained outstanding as of December 31, 2021, that will vest upon the achievement of specified performance goals. In
October 2021, upon approval by the Compensation Committee of the Company’s Board of Directors, certain terms of
the performance-based stock option award agreements were modified. Pursuant to ASC 718, the Company determined
the modification to be a Type IV (improbable-to-improbable) modification and revalued the modified awards as of the
modification date. Upon assessment of the performance-based stock option awards as of December 31, 2021, the
Company determined the first performance goal to be probable of vesting and, as such, recorded $2.6 million of stock-
based compensation expense for the year ended December 31, 2021. The fair value of the performance-based options
that could be expensed in future periods is $7.8 million.

A summary of restricted stock and restricted stock unit activity under the option plans for 2021 is presented

below (in thousands, except weighted-average data):

Unvested at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unvested at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Restricted
Stock Shares
61
75
(2)
(57)
77

Weighted-
Average Grant
Date Fair Value
2.47
$
5.68
2.53
2.47
5.59

In June 2018, the Company's Board of Directors, with shareholder approval, adopted the Employee Stock

Purchase Plan. Following the automatic share increase on January 1, 2021 under the ESPP’s “evergreen” provision, an
aggregate of 2,000,000 shares of common stock have been reserved for issuance under the ESPP. Under the ESPP,
eligible participants purchase shares of the Company's common stock at a price equal to 85% of the lesser of the closing
price of the Company's common stock on the first business day and the final business day of the applicable plan
purchase period. Plan purchase periods are six months and begin on January 1 and July 1 of each year, with purchase
dates occurring on the final business day of the given purchase period. The fair value of each ESPP award is estimated
on the first day of the offering period using the Black-Scholes option-pricing model. The Company recognizes share-
based compensation expense equal to the fair value of the ESPP awards on a straight-line basis over the offering period.

During 2021, 2020, and 2019, approximately 126,000, 122,000, and 356,000 shares, respectively, were issued to
participating employees at fair values ranging from $1.20 to $2.29 per share.

Stock compensation expense related to stock options and restricted stock awards granted under the option plans
and the ESPP was $16.8 million, $14.0 million, and $13.8 million during the years ended December 31, 2021, 2020, and
2019, respectively. As of December 31, 2021, the estimated fair value of unvested employee awards was $28.6 million.
The weighted-average remaining vesting period for these awards is 2.9 years. Also included in stock and deferred stock
unit compensation expense in the consolidated statements of cash flows for the years ended December 31, 2021, 2020,
and 2019 is $0.7 million, $0.4 million, and $0.3 million, respectively, of expense recorded for directors’ deferred share
units, the details of which are discussed in Note H.

A summary of option activity for options vested during the years ended December 31, 2021, 2020, and 2019 is

presented below (in thousands):

Total fair value of options vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Total intrinsic value of options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash received from the exercise of stock options and ESPP purchases . . . . . . .

Year Ended December 31,
2020
11,465 $ 13,747
556
2,873

2021
15,839 $
3,322
3,769

746
1,471

2019

Comprehensive Loss

The Company presents comprehensive loss in accordance with ASC 220, Comprehensive Income.

Comprehensive loss is comprised of the Company’s net loss for all periods presented.

Segment Information

During all periods presented, the Company continued to operate in one reportable business segment under the

management approach of ASC 280, Segment Reporting, which is the business of the discovery and development of
ADCs for the treatment of cancer.

The percentages of revenues recognized from significant customers of the Company in the years ended

December 31, 2021, 2020, and 2019 are included in the following table:

Collaborative Partner:
Roche . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Huadong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Jazz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CytomX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021
67%
24%
-%
-%

Year Ended December 31,
2020
53%
-%
46%
-%

2019
64%
-%
18%
13%

There were no other customers of the Company with significant revenues in the periods presented.

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic

740): Simplifying the Accounting for Income Taxes, which is intended to simplify the accounting for income taxes. ASU
2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing
guidance to improve consistent application. The Company adopted the standard on January 1, 2021, and it did not have a
material effect on the Company’s consolidated financial statements.

In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying

the Interaction between Topic 808 and Topic 606, which clarifies that certain transactions between participants in a
collaborative arrangement should be accounted for under ASC 606 when the counterparty is a customer. In addition,
ASU 2018-18 adds unit-of-account guidance to ASC 808 in order to align this guidance with ASC 606 and also
precludes an entity from presenting consideration from a transaction in a collaborative arrangement as revenue from
contracts with customers if the counterparty is not a customer for that transaction. This guidance is effective for annual
reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods.
The Company adopted the standard on January 1, 2020, and it did not have a material effect on the Company’s
consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, to

require financial assets carried at amortized cost to be presented at the net amount expected to be collected based on
historical experience, current conditions, and forecasts. The ASU is effective for interim and annual periods beginning

after December 15, 2019. Adoption of the ASU is on a modified retrospective basis. The Company adopted the standard
on January 1, 2020, and it did not have a material effect on the Company’s consolidated financial statements.

No other recently issued or effective ASUs had, or are expected to have, a material effect on the Company's

results of operations, financial condition, or liquidity.

Agreements

Significant Collaborative Agreements

Roche

In 2000, the Company granted Genentech, now a unit of Roche, an exclusive development and

commercialization license to use the Company’s maytansinoid ADC technology with antibodies, such as trastuzumab, or
other proteins that target HER2. Under the terms of this agreement, Roche has exclusive worldwide rights to develop
and commercialize maytansinoid ADC compounds targeting HER2. Pursuant to this agreement, Roche developed and
received marketing approval for its HER2-targeting ADC, KADCYLA, in the U.S., Japan, the European Union, and
numerous other countries. Roche is responsible for the manufacturing, product development, and marketing of any
products resulting from the agreement. The Company received a $2.0 million non-refundable upfront payment from
Roche upon execution of the agreement. The Company is also entitled to receive up to a total of $44.0 million in
development and regulatory milestone payments, plus royalties on the commercial sales of KADCYLA or any other
resulting products. Through December 31, 2021, the Company had received and recognized $39.0 million in milestone
payments related to KADCYLA, including a $5.0 million regulatory milestone payment to the Company for a first
extended indication, which is included in license and milestone fees for the year ended December 31, 2019.

The Company receives royalty reports and payments related to sales of KADCYLA from Roche one quarter in
arrears. In accordance with the Company’s revenue recognition policy, $46.8 million, $68.5 million, and $47.4 million
of non-cash royalties on net sales of KADCYLA were recorded and included in royalty revenue for the years ended
December 31, 2021, 2020, and 2019. The Company sold its rights to receive royalty payments on the net sales of
KADCYLA through two separate transactions in 2015 and 2019. Following the 2019 transaction, OMERS, the defined
benefit pension plan for municipal employees in the Province of Ontario, Canada, is entitled to receive all of these
royalties.

Roche, through its Genentech unit, also has licenses for the exclusive right to use the Company’s maytansinoid

ADC technology with antibodies to four undisclosed targets, which were granted under the terms of a separate, now
expired, 2000 right-to-test agreement with Genentech. For each of these licenses, the Company received a $1.0 million
license fee and is entitled to receive up to a total of $38.0 million in development, regulatory, and sales-based milestone
payments plus royalties on the sales of any resulting products. The Company has not received any milestone payments
from these agreements through December 31, 2021. Roche is responsible for the development, manufacturing, and
marketing of any products resulting from these licenses.

Amgen/Oxford BioTherapeutics

Under a now-expired right-to-test agreement established in 2000, the Company granted Amgen an exclusive

development and commercialization license for which the Company received a $1.0 million exercise fee and is entitled
to receive up to a total of $34.0 million in development, regulatory, and sales-based milestone payments, plus royalties
on the commercial sales of any resulting products. Through December 31, 2021, the Company had received and
recognized a $1.0 million milestone payment under this agreement. Amgen subsequently sublicensed its rights under the
license to Oxford BioTherapeutics Ltd. (OBT). Amgen (or its sublicensee(s)) is responsible for the manufacturing,
development, and marketing of any products resulting from the license.

Bayer

In 2008, the Company granted Bayer an exclusive development and commercialization license to the

Company’s maytansinoid ADC technology for use with antibodies or other proteins that target mesothelin. The
Company received a $4.0 million upfront payment upon execution of the agreement. For each compound developed and
marketed by Bayer under this collaboration, the Company is entitled to receive a total of $170.5 million in development,
regulatory, and sales-based milestone payments, plus royalties on the commercial sales of any resulting products.
Through December 31, 2021, the Company had received and recognized an aggregate of $13.0 million in milestone
payments under this agreement. Bayer is responsible for the research, development, manufacturing, and marketing of
any products resulting from the license.

Novartis

The Company granted Novartis exclusive development and commercialization licenses to the Company’s

maytansinoid and IGN ADC technology for use with antibodies to six specified targets under a now-expired right-to-test
agreement established in 2010. The Company received a $45.0 million upfront payment in connection with the execution
of the right-to-test agreement in 2010, $8.5 million in extension and amendment fees, and an exercise fee of $1.0 million
for each of the six licenses taken. In May 2018, Novartis terminated one of its six licenses.

For each of the remaining development and commercialization licenses, the Company is entitled to receive up

to a total of $199.5 million in development, regulatory, and sales-based milestone payments, plus royalties on the
commercial sales of any resulting products. In 2015 and 2016, Novartis initiated Phase 1 testing of three of its five
product candidates, triggering a $5.0 million development milestone payment to the Company with each event. Novartis
later discontinued clinical testing of these three products. In December 2019, a development milestone related to dosing
a first patient in a Phase 1 clinical trial for a licensed product became probable of being attained. Accordingly, $4.7
million of the $5.0 million milestone that was allocated to the delivered license was recorded as revenue and is included
in license and milestone fees for the year ended December 31, 2019, and $0.3 million that was allocated to future
technological improvements was deferred and will be recognized as revenue ratably over the estimated term of the
license. In September 2020, Novartis enrolled its first patient in the aforementioned Phase 1 clinical trial and remitted
the $5.0 million milestone payment to the Company. Novartis is responsible for the manufacturing, development, and
marketing of any products resulting from these licenses.

CytomX

In 2016, the Company granted CytomX an exclusive development and commercialization license to the
Company’s maytansinoid ADC technology for use with Probodies™ that target CD166 under a now expired reciprocal
right-to-test agreement. The Company neither received nor made an upfront cash payment in connection with the
execution of the right-to-test agreement or the license agreement. With respect to the development and
commercialization license granted to CytomX, the Company is entitled to receive up to a total of $160.0 million in
development, regulatory, and sales-based milestone payments plus royalties on the commercial sales of any resulting
product. Through December 31, 2021, the Company had received and recognized an aggregate of $4.0 million in
milestone payments under this agreement, of which $3.0 million is included as license and milestone fee revenue for the
year ended December 31, 2019.

In December 2019, the Company granted CytomX an exclusive development and commercialization license to

maytansinoid and IGN ADC technology for use with Probodies™ that target EpCAM. Pursuant to the license agreement,
in January 2020, the Company received a $7.5 million upfront payment, of which $7.3 million was recorded as license
and milestone fee revenue upon delivery of the license to CytomX in December 2019 and $0.2 million was deferred until
delivery of certain materials as these performance obligations were determined to be distinct. The Company is also
entitled to receive up to a total of $355.0 million in development, regulatory, and sales-based milestone payments plus
royalties on the commercial sales of any resulting product. The Company had not received any milestone payments
under this agreement through December 31, 2021.

CytomX is responsible for the manufacturing, product development, and marketing of any products resulting

from these licenses.

Fusion

In December 2016, the Company entered into an exclusive license agreement to a specified target with Fusion
Pharmaceuticals Inc. The Company is entitled to receive up to a total of $50.0 million in development, regulatory, and
sales-based milestone payments plus royalties on the commercial sales of any resulting products. Through December 31,
2021, the Company had received and recognized a $0.5 million milestone payment under this agreement. Fusion is
responsible for the manufacturing, product development, and marketing of any products resulting from the license.

Debiopharm

In May 2017, Debiopharm International SA (Debiopharm) acquired the Company’s IMGN529 program, a

clinical-stage anti-CD37 ADC for the treatment of patients with B-cell malignancies, such as non-Hodgkin lymphomas
(NHL). Under the terms of the Exclusive License and Asset Purchase agreement, the Company received a $25.0 million
upfront payment for specified assets related to IMGN529 and an exclusive license to additional intellectual property
necessary or useful for Debiopharm to develop and commercialize IMGN529 (now known as Debio 1562). The
Company also received a $5.0 million milestone payment upon transfer of ImmunoGen technologies related to the

program (technology transfer) and was entitled to receive a $25.0 million milestone payment upon IMGN529 entering a
Phase 3 clinical trial.

In October 2021, the Company and Debiopharm amended their agreement, pursuant to which the Company is

entitled to receive a percentage of all payments generated from future sublicenses of Debio 1562, including upfront fees,
milestones, and royalties, up to an aggregate of $30.0 million and in lieu of the potential $25.0 million development
milestone payment under the original agreement.

Viridian

In October 2020, the Company entered into a license agreement with Viridian Therapeutics, Inc. pursuant to
which the Company granted Viridian the exclusive right to develop and commercialize an insulin-like growth factor-1
receptor (IGF-1R) antibody for all non-oncology indications that do not use radiopharmaceuticals in exchange for an
upfront payment, with the potential to receive up to a total of $143.0 million in development, regulatory, and sales-based
milestone payments plus royalties on the commercial sales of any resulting product. In 2021, the Company received a
$2.5 million payment related to a development milestone achieved in October 2021 and a second $3.0 million
development milestone became probable of being achieved, which resulted in $5.5 million being allocated to the
previously delivered license and recognized as revenue as a component of license and milestone fees for the year ended
December 31, 2021. Viridian is responsible for the manufacturing, development, and marketing of any products resulting
from the license agreement.

Huadong

In October 2020, the Company entered into a collaboration and license agreement with Hangzhou Zhongmei

Huadong Pharmaceutical Co., Ltd. (Huadong), a subsidiary of Huadong Medicine Co., Ltd. The collaboration and
license agreement grants Huadong an exclusive, royalty-bearing, and sublicensable right to develop and commercialize
mirvetuximab (the Licensed Product) in the People’s Republic of China, Hong Kong, Macau, and Taiwan (collectively,
Greater China). The Company retains exclusive rights to the Licensed Product outside of Greater China. Under the terms
of the collaboration and license agreement, the Company received a non-refundable upfront payment of $40.0 million
with the potential for approximately $265.0 million in development, regulatory, and sales-based milestone payments. In
addition, the Company is entitled to receive tiered percentage royalties ranging from low double digits to high teens as a
percentage of commercial sales of the Licensed Product, if approved, by Huadong in Greater China, subject to
adjustment in specified circumstances.

The Company evaluated the agreement and determined it was within the scope of ASC 606. The Company

determined the promised goods and services included the license to intellectual property and know-how and the clinical
supply of the Licensed Product to Huadong for a specified period. The Company concluded that the license to
intellectual property and know-how is not distinct from the clinical supply of the Licensed Product because the clinical
supply is essential to the use of the license and an alternative source of clinical supply is not readily available in the
marketplace. Accordingly, these two promised goods and services are considered a single combined performance
obligation. The Company determined there were no options in the agreement that represented material rights.

The transaction price was determined to consist of the upfront payment of $40.0 million and estimated

payments to be received for clinical supply of the Licensed Product. At contract inception, future development and
regulatory milestones were fully constrained. Any consideration related to sales-based milestones (including royalties)
will be recognized when the related sales occur as these amounts have been determined to relate predominantly to the
license granted to Huadong. The Company re-evaluates the transaction price, including its estimated variable
consideration included in the transaction price and all constrained amounts, at each reporting period and as uncertain
events are resolved or other changes in circumstances occur.

The Company determined that revenue related to the agreement would be recognized as the clinical supply of
the Licensed Product is delivered to Huadong, estimated to be completed over approximately two years. The Company
has estimated the total clinical supply to be delivered during this time and will reassess the percentage of clinical supply
that has been delivered on an ongoing basis. If a change in estimate is determined to be necessary, the Company will
adjust revenue using a cumulative catch-up method.

In 2021, the first shipment of clinical supply was delivered to Huadong and, based on the total estimated
clinical supply to be delivered, $14.6 million was recorded as license and milestone fee revenue. Additionally, in
December 2021, the Company received a $5.0 million payment upon achievement of a development milestone, of which
$1.8 million was recognized as license and milestone fee revenue in 2021 and $3.2 million was deferred and will be
recorded as revenue as clinical supply is delivered in 2022. As of December 31, 2021, the total deferred revenue

balances related to the Huadong arrangement was $28.6 million and is expected to be recognized during 2022 as clinical
supply is delivered.

Terminated Agreements

Jazz Pharmaceuticals

In August 2017, the Company entered into a Collaboration and Option Agreement with Jazz Pharmaceuticals
Ireland Limited (Jazz), a subsidiary of Jazz Pharmaceuticals plc, granting Jazz exclusive, worldwide rights to opt into
development and commercialization of two early-stage, hematology-related ADC programs, as well as an additional
program to be designated during the term of the agreement. Pursuant to the agreement, Jazz made an upfront payment of
$75.0 million to the Company. Additionally, Jazz had also agreed to pay the Company up to $100.0 million in
development funding over seven years to support the three ADC programs.

Due to the involvement the Company and Jazz both had in the development and commercialization of the
products, as well as both parties being part of the cost share agreement and exposed to significant risks and rewards
dependent on the commercial success of the products, the arrangement was determined to be a collaborative arrangement
within the scope of ASC 808. Accordingly, the Company separated the research and development activities and the
related cost sharing arrangement with Jazz. Payments for such activities were recorded as research and development
expense and reimbursements received from Jazz were recognized as an offset to research and development expense in
the accompanying statement of operations during the development period. Included in research and development
expense for the years ended December 31, 2021, 2020, and 2019, are $6.7 million, $6.7 million, and $12.5 million of
credits related to reimbursements from Jazz, respectively.

In October 2019 and December 2020, Jazz exercised certain opt-out rights under the agreement, thereby
relinquishing its development and commercialization options and restoring all rights to the ADC programs to the
Company. The non-refundable, upfront arrangement consideration of $75.0 million was allocated to the three license
options. The amount allocated to the rights to future technological improvements under the relative selling price method
was deemed immaterial and, therefore, not segregated from the license options. In conjunction with the opt-outs, the
Company recognized $60.5 million and $14.5 million of the deferred upfront fee as license and milestone fee revenue in
the years ended December 31, 2020 and 2019, respectively.

Takeda

In March 2015, the Company entered into a three-year right-to-test agreement with Takeda Pharmaceutical

Company Limited (Takeda) through its wholly-owned subsidiary, Millennium Pharmaceuticals, Inc., pursuant to which
the Company received a $20.0 million upfront payment. A first license was granted to Takeda in 2015, and in 2018, the
right-to-test agreement expired without Takeda exercising its option to a second license. In 2020, Takeda terminated its
exclusive development and commercialization license. As a result, the Company recorded the remaining $0.9 million
balance of the upfront payment that had been allocated to future performance obligations under the license as revenue,
which is included in license and milestone fees for the year ended December 31, 2020.

Biotest

In 2006, the Company granted Biotest an exclusive development and commercialization license to the
Company’s maytansinoid ADC technology for use with antibodies that target CD138, pursuant to which the Company
received a $1.0 million upfront payment. In 2020, Biotest terminated the license.

Property and Equipment

Property and equipment consisted of the following at December 31, 2021 and 2020 (in thousands):

Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computer hardware and software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assets under construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

December 31,
2021
22,051 $
2,955
5,846
3,265
233
34,350 $
(29,687)

4,663 $

December 31,
2020
21,890
2,861
5,636
3,039
97
33,523
(27,763)
5,760

Included in the table above are amounts capitalized for equipment under capital leases at December 31, 2021

and 2020 totaling $2.1 million, net of accumulated amortization of $1.6 million and $1.3 million, respectively.
Depreciation expense was $2.0 million, $2.1 million , and $4.0 million for the years ended December 31, 2021, 2020 and
2019, respectively. As a result of the restructuring at the end of the second quarter of 2019, the Company recorded an
impairment charge of $2.5 million to write down excess equipment to fair value. During the fourth quarter of 2019, the
Company executed an agreement to liquidate the equipment and transferred title to assets with a cost basis of $14.2
million and accumulated depreciation of $12.9 million, for which the Company received a $2 million payment. During
the year ended December 31, 2020, the Company liquidated the remaining equipment with a cost basis of $6.7 million
for an additional $1.2 million payment to the Company.

Convertible 4.5% Senior Notes

In 2016, the Company issued convertible notes with an aggregate principal amount of $100 million, of which

$2.1 million remained outstanding as of December 31, 2020. In June 2021, $1.0 million of outstanding convertible notes
were converted into 238,777 shares of the Company’s common stock and the remaining $1.1 million outstanding was
repaid in full by a cash payment upon maturity on July 1, 2021. The convertible notes were senior unsecured obligations
and bore interest at a rate of 4.5% per year, payable semi-annually in arrears on January 1 and July 1 of each year,
commencing on January 1, 2017. The Company recorded $0.1 million of interest expense in each of the years ended
December 31, 2021, 2020 and 2019, respectively. The Company analyzed the terms of the convertible notes and
determined the notes were entirely accounted for as debt and none of the terms of the notes required separate accounting.

Liability Related to Sale of Future Royalties

In 2015, Immunity Royalty Holdings, L.P. (IRH) purchased the right to receive 100% of the royalty payments

on commercial sales of KADCYLA arising under the Company’s development and commercialization license with
Genentech, until IRH had received aggregate royalties equal to $235 million or $260 million, depending on when the
aggregate royalties received by IRH reached a specified milestone. Once the applicable threshold was met, the Company
would thereafter have received 85% and IRH would have received 15% of the KADCYLA royalties for the remaining
royalty term. At consummation of the transaction, the Company received cash proceeds of $200 million. As part of this
sale, the Company incurred $5.9 million of transaction costs, which are presented net of the liability in the
accompanying consolidated balance sheet and are being amortized to interest expense over the estimated life of the
royalty purchase agreement. Although the Company sold its rights to receive royalties from the sales of KADCYLA, as
a result of its ongoing involvement in the cash flows related to these royalties, the Company continues to account for
these royalties as revenue and recorded the $200 million in proceeds from this transaction as a liability related to sale of
future royalties (Royalty Obligation) that is being amortized using the interest method over the estimated life of the
royalty purchase agreement.

In January 2019, the Company sold its residual rights to receive royalty payments on commercial sales of

KADCYLA to OMERS, the defined benefit pension plan for municipal employees in the Province of Ontario, Canada,
for a net payment of $65.2 million (amount is net of $1.5 million in broker fees). Simultaneously, OMERS purchased
IRH’s right to the royalties the Company previously sold as described above, therefore obtaining the rights to 100% of
the royalties received from that date on. Because the Company will not be involved with the cash flows related to the
residual royalties, the $65.2 million of net proceeds received from the sale of its residual rights to receive royalty
payments was recorded as deferred revenue and is being amortized as the royalty revenue related to the residual rights is
earned using the units of revenue approach. During the second quarter of 2021, the aggregate royalty threshold was met

and, in accordance with the Company’s revenue recognition policy, $7.7 million of revenue related to the residual rights
was recorded and is included in non-cash royalty revenue for the year ended December 31, 2021. Additionally, the
purchase of IRH’s interest by OMERS did not result in an extinguishment or modification of the original instrument and,
accordingly, the Company will continue to account for the remaining obligation as a liability as outlined above.

The following table shows the activity within the liability account during the year ended December 31, 2021

and the period from inception (in thousands):

Year Ended

December 31, 2021

Period from
inception to
December 31, 2021

Liability related to sale of future royalties, net — beginning balance . . . . . . . $
Proceeds from sale of future royalties, net . . . . . . . . . . . . . . . . . . . . . . . . . .
KADCYLA royalty payments received and paid . . . . . . . . . . . . . . . . . . . .
Non-cash interest expense recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liability related to sale of future royalties, net — ending balance . . . . . . . . . $

85,439 $
—
(57,490)
13,095
41,044 $

—
194,135
(263,857)
110,766
41,044

The Company receives royalty reports and royalty payments related to sales of KADCYLA from Roche one

quarter in arrears. As royalties are remitted to OMERS, the balance of the Royalty Obligation will be effectively repaid
over the life of the agreement. In order to determine the amortization of the Royalty Obligation, the Company is required
to estimate the total amount of future royalty payments to be received and remitted as noted above over the life of the
agreement. The sum of these amounts less the $200 million proceeds the Company received from IRH will be recorded
as interest expense over the life of the Royalty Obligation. Since inception, the Company’s estimate of this total interest
expense has resulted in an imputed annual interest rate of 10.5% and a current imputed interest rate of 19.5% as of
December 31, 2021. The Company periodically assesses the estimated royalty payments to IRH/OMERS and to the
extent such payments are greater or less than its initial estimates, or the timing of such payments is materially different
than its original estimates, the Company will prospectively adjust the amortization of the Royalty Obligation. There are a
number of factors that could materially affect the amount and timing of royalty payments from Genentech, most of
which are not within the Company’s control. Such factors include, but are not limited to, changing standards of care, the
introduction of competing products, manufacturing or other delays, biosimilar competition, patent protection, adverse
events that result in governmental health authority imposed restrictions on the use of the drug products, significant
changes in foreign exchange rates as the royalties are paid in U.S. dollars (USD) while significant portions of the
underlying sales of KADCYLA are made in currencies other than USD, and other events or circumstances that could
result in reduced royalty payments from KADCYLA, all of which would result in a reduction of non-cash royalty
revenues and non-cash interest expense over the life of the Royalty Obligation. Conversely, if sales of KADCYLA are
more than expected, the non-cash royalty revenues and the non-cash interest expense recorded by the Company would
be greater over the term of the Royalty Obligation.

Income Taxes

The difference between the Company’s expected tax benefit, as computed by applying the applicable U.S.

federal corporate tax rate to loss before the benefit for income taxes, and actual tax is reconciled in the following table
(in thousands):

Years Ended December 31,

Loss before income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Expected tax benefit at 21% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Permanent differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incentive stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State tax benefit net of federal benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal research credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal orphan drug credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired loss and credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Withholding tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock option expirations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefit for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021

(139,303) $
(29,254) $
606
420
(7,376)
46,987
(575)
(7,429)
345
(4,789)
1,065

— $

2019

2020
(44,372) $ (104,133)
(9,318) $ (21,868)
320
569
(6,726)
27,812
(1,652)
(4,426)
500
—
5,471
—

157
201
(2,250)
15,175
(228)
(6,218)
419
—
2,062

— $

At December 31, 2021, the Company had net operating loss, or NOL, carryforwards of $471.6 million available

to reduce federal taxable income, if any, that begin to expire in 2028 through 2037 and an additional $536.6 million of

federal NOL carryforwards that can be carried forward indefinitely. The Company has $839.6 million of NOL
carryforwards available to reduce state taxable income, if any, that expire in 2033 through 2041. The Company also has
federal and state credit carryforwards of $77.9 million and $12.1 million, respectively, available to offset federal and
state income taxes, which expire beginning in 2023 and foreign tax credits of $5.4 million that expire in 2030 and 2031.
Due to the degree of uncertainty related to the ultimate use of the loss carryforwards and tax credits, the Company has
established a valuation allowance to fully reserve these tax benefits.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of

assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant
components of the Company’s deferred tax assets and liabilities as of December 31, 2021 and 2020 are as follows (in
thousands):

December 31,

2021

2020

Deferred tax assets:

Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Research and development tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Royalty sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

264,773 $
92,832
1,150
25,153
12,286
5,170
1,737
10,247
413,348 $

220,286
80,694
871
30,082
9,940
6,033
1,514
17,455
366,875

Deferred tax liabilities:

Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease right of use asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Royalty sale transaction costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax assets/(liabilities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

(91)
(3,386)
(158)
(3,635) $

(409,713)

— $

(58)
(3,844)
(247)
(4,149)
(362,726)
—

The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax

assets. The Company has determined that it is not more-likely-than-not that the tax benefits related to the federal and
state deferred tax assets will be realized for financial reporting purposes. Accordingly, the deferred tax assets have been
fully reserved at December 31, 2021 and 2020. The valuation allowance increased by $47.0 million during the year
ended December 31, 2021 due primarily to additional net loss incurred during the year.

Utilization of the NOL and credit carryforwards may be subject to a substantial annual limitation due to
ownership change limitations that have occurred previously or that could occur in the future as provided by Sections 382
and 383 of the Internal Revenue Code of 1986, as well as similar state and foreign provisions. These ownership changes
may limit the amount of NOL and credit carry forwards that can be utilized annually to offset future taxable income and
tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions increasing the
ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over
a three-year period. Since the Company’s formation, it has raised capital through the issuance of capital stock on several
occasions (both pre and post initial public offering) which, combined with the purchasing shareholders’ subsequent
disposition of those shares, may have resulted in a change of control, as defined by Section 382, or could result in a
change of control in the future upon subsequent disposition. During fiscal year 2015, the Company completed a study to
assess whether a change of control has occurred or whether there have been multiple changes of control since its
formation and determined no ownership change occurred under Section 382. This study was updated through
December 31, 2021 resulting in the same conclusion. Additionally, the Company has not completed a detailed Research
and Development Credit Study (including the Orphan Drug Credit); accordingly, a portion of the tax credit carryforward
may not be available to offset future income.

The Company accounts for uncertain tax positions under the recognition and measurement criteria of ASC
740-10. For those tax positions for which it is more likely than not that a tax benefit will be sustained, the Company
records the largest amount of tax benefit with a greater than 50% likelihood of being realized upon settlement with a
taxing authority that has full knowledge of all relevant information. If the Company does not believe that it is not more
likely than not that a tax benefit will be sustained, no tax benefit is recognized. As of December 31, 2021 and 2020, no

uncertain tax positions have been recorded. Interest and penalties related to the settlement of uncertain tax positions, if
any, will be reflected in income tax expense. The Company did not recognize any interest and penalties associated with
unrecognized tax benefits in the accompanying consolidated financial statements. The Company does not expect any
material changes to the unrecognized benefits within 12 months of the reporting date. Due to existence of the valuation
allowance, future changes in the Company’s unrecognized tax benefits will not impact its effective tax rate.

The statute of limitations for assessment by the Internal Revenue Service, or IRS, and state tax authorities is

open for tax years ending after December 31, 2018, although carryforward attributes that were generated prior to
2018 may still be adjusted upon examination by the IRS or state tax authorities if they either have been or will be used in
a future period.

Capital Stock

Common Stock Reserved

At December 31, 2021, the Company had reserved 33.6 million shares of authorized common stock for the

future issuance of shares under the 2018, ESPP, and Inducement Plans. See “Stock-Based Compensation” in Note B for
a description of the 2018, ESPP, and Inducement Plans. Additionally, the Company has reserved 32.8 million shares of
authorized common stock for future issuance pursuant to pre-funded warrant agreements, the details of which are
discussed below.

Pre-Funded Warrants

In August 2021, the Company entered into a Securities Purchase Agreement (SPA) with RA Capital Healthcare
Fund, L.P. (RA Capital), pursuant to which the Company agreed to sell to RA Capital a pre-funded warrant to purchase
up to 5,434,782 shares of common stock for $5.51 per share of common stock underlying the pre-funded warrant. The per
share exercise price of the pre-funded warrant is $0.01. The private placement resulted in aggregate gross proceeds of
$29.9 million, before $0.2 million of transaction costs.

In connection with a public offering in December 2021, the Company issued pre-funded warrants to purchase
16,000,000 and 11,363,636 shares of common stock to RA Capital and Redmile Group, LLC, respectively, for $6.59 per
share of common stock underlying the pre-funded warrants, which, together with the per share exercise price of $0.01, is
equal to $6.60, the public offering price of the shares of common stock in the offering. RA Capital and Redmile Group,
LLC are each considered related parties pursuant to ASC 850, Related Party Disclosures.

The pre-funded warrants’ fundamental transaction provision does not provide the warrant holders with the

option to settle any unexercised warrants for cash in the event of any fundamental transactions; rather, in all fundamental
transaction scenarios, the warrant holder will only be entitled to receive from the Company or any successor entity the
same type or form of consideration (and in the same proportion) that is being offered and paid to the shareholders of the
Company in connection with the fundamental transaction, whether that consideration be in the form of cash, stock or any
combination thereof. The pre-funded warrants also include a separate provision whereby the exercisability of the
warrants may be limited if, upon exercise, the warrant holder or any of its affiliates would beneficially own more
than 9.99% of the Company’s common stock. This threshold is subject to the holder’s rights under the pre-funded
warrants to increase or decrease such percentage to any other percentage not in excess of 19.99% upon at least 61 days’
prior notice from the holder to the Company.

The Company has assessed the pre-funded warrants for appropriate equity or liability classification pursuant to

the Company’s accounting policy described in Note B, “Summary of Significant Accounting Policies.” During this
assessment, the Company determined the pre-funded warrants are freestanding instruments that do not meet the
definition of a liability pursuant to ASC 480 and do not meet the definition of a derivative pursuant to ASC 815. The
pre-funded warrants are indexed to the Company’s common stock and meet all other conditions for equity classification
under ASC 480 and ASC 815. Based on the results of this assessment, the Company concluded that the pre-funded
warrants are freestanding equity-linked financial instruments that meet the criteria for equity classification under ASC
480 and ASC 815. Accordingly, the pre-funded warrants are classified as equity and accounted for as a component of
additional paid-in capital at the time of issuance. The Company also determined that the pre-funded warrants should be
included in the determination of basic and diluted earnings per share in accordance with ASC 260, Earnings per Share.

Stock Options

As of December 31, 2021, the 2018 Plan and the Inducement Plan were the only employee share-based

compensation plans of the Company under which grants can be made. During the year ended December 31, 2021,
holders of options issued under the option plans exercised their rights to acquire an aggregate of 872,000 shares of

common stock at prices ranging from $1.84 to $7.07 per share. The total proceeds to the Company from these option
exercises were $3.1 million. Additionally, during 2021 and pursuant to the Company’s ESPP, approximately 126,000
shares of common stock were issued to participating employees generating $0.7 million of proceeds to the Company.

2004 Non-Employee Director Compensation and Deferred Share Unit Plan

Under the 2004 Non-Employee Director Compensation and Deferred Share Unit Plan, or the 2004 Director

Plan, as amended, between 2004 and 2009 non-employee directors were paid their annual retainers in the form of
deferred stock units, based on the fair market value of the Company’s common stock on the last date of the Company’s
fiscal year prior to the year for which services were rendered, and in cash, with the option, at their discretion, to have all
or a portion of the cash portion paid in additional deferred stock units. All deferred stock units awarded under the 2004
Director Plan have vested and are redeemed on the date a director ceases to be a member of the Board, at which time
such director’s deferred stock units will be settled in shares of common stock of the Company issued under the 2006
Plan at a rate of one share for each vested unit.

Compensation Policy for Non-Employee Directors

In September 2009, the Board adopted a new Compensation Policy for Non-Employee Directors, which

superseded the 2004 Plan and made certain changes to the compensation of its non-employee directors. The
Compensation Policy for Non-Employee Directors, as amended as of December 2021, consists of three elements: cash
compensation; deferred stock units; and stock options.

Cash Compensation

Each non-employee director receives annual meeting fees which are paid in quarterly installments in, at each

director’s election, either cash or deferred stock units.

Deferred Stock Units

Pursuant to the Compensation Policy for Non-Employee Directors, as amended, non-employee directors receive

deferred stock units upon initial election to the Board and annually thereafter. Vested deferred stock units are redeemed
on the date a director ceases to be a member of the Board, at which time such director’s deferred stock units will
generally be settled in shares of the Company’s common stock issued under our 2018 Plan (or its predecessor plans,
depending on the grant date of the deferred stock units) at a rate of one share for each vested deferred stock unit then
held. Any deferred stock units that remain unvested at that time will be forfeited.

Pursuant to the Compensation Policy for Non-Employee Directors, as amended, the Company recorded:
•

$0.7 million in compensation expense during the year ended December 31, 2021 related to the grant of
166,000 deferred share units and 52,000 deferred share units previously granted;

•

$0.3 million in compensation expense during the year ended December 31, 2020 related to the grant of
127,000 deferred share units and 15,000 deferred share units previously granted; and

$0.3 million in compensation expense during the year ended December 31, 2019 related to the grant of
63,000 deferred share units and 18,000 deferred share units previously granted.

Stock Options

Pursuant to the Compensation Policy for Non-Employee Directors, as amended, non-employee directors also
receive stock option awards upon initial election to the Board and annually thereafter. The directors received a total of
352,000, 300,000, and 108,000 options in the years ended December 31, 2021, 2020, and 2019, and the related stock
compensation expense is included in the amounts discussed in the “Stock-Based Compensation” section of footnote B
above.

Restructuring Charge

2019 Corporate Restructuring

On June 26, 2019, the Board of Directors approved a plan to restructure the business to focus resources on

continued development of mirvetuximab and a select portfolio of three earlier-stage product candidates, resulting in a
significant reduction of the Company’s workforce, with a majority of these employees separating from the business by
mid-July 2019 and most of the remaining affected employees transitioning over varying periods of time of up to 12
months. Communication of the plan to the affected employees was substantially completed on June 27, 2019.

As a result of the workforce reduction, the Company recorded a $16.0 million charge for severance during the

year ended December 31, 2019 related to a pre-existing plan in accordance with ASC 712, Compensation-Nonretirement
Postemployment Benefits, as such amounts were probable and reasonably estimable. The estimate was reduced during
2020 to $15.3 million due to minor adjustments to the plan. The related cash payments were substantially paid out by
June 30, 2020. In addition, a charge of $4.0 million was incurred for incremental retention benefits over the same time
period, of which $1.6 million and $2.4 million was recorded during the years ended December 31, 2020 and 2019,
respectively.

A summary of activity against the 2019 corporate restructuring charge related to the employee terminations is

as follows:

Balance at December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Additional charges/adjustments during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Employee
Termination
Benefits Costs

784
—
(443)
341

In addition to the termination benefits and other related charges, the Company has sub-leased laboratory and

office space at 830 Winter Street in Waltham, Massachusetts no longer used in the business. The decision to vacate part
of its corporate office resulted in a change in asset groupings and also represented an impairment indicator. The
Company determined and continues to believe that the related right-of-use asset and leasehold improvements are
recoverable based on expected sublease income, and therefore, no impairment has been recorded.

In addition, the Company also decided to liquidate excess laboratory equipment and expected the proceeds to be

less than the carrying value. As a result, in 2019, the Company recorded an impairment charge of $2.5 million to write
down the equipment to fair value based on current market re-sale estimates obtained.

Charge Related to Unoccupied Office Space

The Company sought to sub-lease 10,281 square feet of unoccupied office space at 930 Winter Street in
Waltham, Massachusetts that was leased in 2016. During 2019, the Company recorded a $0.6 million impairment charge
related to this lease, which represented the remaining balance of the right to use asset as the likelihood of finding a sub-
lessor had diminished significantly as the lease approached termination in August 2021.

Leases

The Company currently has one real estate lease with CRP/King 830 Winter L.L.C. for the rental of

approximately 120,000 square feet of laboratory and office space at 830 Winter Street, Waltham, Massachusetts through
March 2026. The Company uses this space for its corporate headquarters and other operations. The Company may
extend the lease for two additional terms of five years and is required to pay certain operating expenses for the leased
premises subject to escalation charges for certain expense increases over a base amount. During 2020, the Company
executed four subleases for approximately 65,000 square feet through the remaining initial term of the lease. The balance
of the space will be used by the Company.

In addition to the real estate lease noted above, the Company currently has a lease agreement through

March 2027 for the rental of copier equipment.

Upon adoption of ASC 842, Leases, in 2019, a ROU asset of $17.6 million and a lease liability of $27.3 million

were recorded and are identified separately in the Company’s consolidated balance sheets for the existing operating
leases. There was no impact to the consolidated statements of operations. Upon adoption, the amount of the ROU assets
recorded was offset by the applicable unamortized lease incentive and straight-line lease liability balances of $9.7
million and, therefore, there was no impact to accumulated deficit. There were no initial direct costs related to the leases
to consider. The Company’s operating lease liabilities related to its real estate lease agreements were calculated using a
collateralized incremental borrowing rate. The weighted average discount rate for the operating lease liability is
approximately 11%. A 100-basis point change in the incremental borrowing rate would result in less than a $1 million
impact to the ROU assets and liabilities recorded. Lease expense for operating lease payments is recognized on a
straight-line basis over the lease term, which for the years ended December 31, 2021, 2020, and 2019 was $4.0 million,
$4.0 million, and $4.3 million, respectively, and is included in operating expenses in the consolidated income statements.

During 2019, the Company recorded $0.6 million of impairment charges related to its 930 Winter Street lease, which
represents the remaining balance of the right to use asset as the likelihood of finding a sub-lessor has diminished
significantly as the lease approaches termination. Cash paid against operating lease liabilities during the years ended
December 31, 2021 and 2020 was $5.3 million and $5.5 million, respectively. As of December 31, 2021, the Company’s
ROU assets and lease liabilities for operating leases totaled $12.4 million and $18.8 million, respectively, and the
weighted average remaining term of the operating leases is approximately 4.25 years.

The maturities of operating lease liabilities discussed above are as follows (in thousands):

2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,363
5,503
5,522
5,543
1,429
13
23,373
(4,592)
18,781

In addition to the amounts in the table above, the Company is also responsible for variable operating costs and

real estate taxes approximating $3.4 million per year through March 2026.

Sublease Income

In 2020, the Company executed four agreements to sublease a total of approximately 65,000 square feet of the

Company’s leased space at 830 Winter Street, Waltham, Massachusetts through March 2026. During the years ended
December 31, 2021 and 2020, the Company recorded $4.9 million and $2.8 million of sublease income, respectively,
inclusive of the sublessees’ proportionate share of operating expenses and real estate taxes for the period.

Two of the four sublease agreements include an early termination option after certain periods of time for an

agreed-upon fee. Assuming no early termination option is exercised, the Company will receive $13.3 million in
minimum rental payments over the remaining term of the subleases, which is not included in the operating lease liability
table above. The sublessees are also responsible for their proportionate share of variable operating expenses and real
estate taxes.

Commitments and Contingencies

Manufacturing Commitments

As of December 31, 2021, the Company has noncancelable obligations under several agreements related to in-

process and future manufacturing of antibody and cytotoxic agents required for supply of the Company’s product
candidates totaling $7.1 million, which will be paid in 2022. Additionally, pursuant to commercial agreements for future
production of antibody, the Company’s noncancelable commitments total $41.6 million at December 31, 2021.

License Commitment

In October 2021, as a result of a dispute regarding terms of a 2012 license agreement with a contract
manufacturing vendor, the Company and vendor amended their agreement to replace certain annual fees and potential
royalties payable by the Company on future sales of mirvetuximab with capped development and sales-based milestone
payments totaling $18.0 million, of which $3.0 million was recorded as research and development expense during the
year ended December 31, 2021.

Litigation

The Company is not party to any material litigation.

Employee Benefit Plans

The Company has a deferred compensation plan under Section 401(k) of the Internal Revenue Code (the

401(k) Plan). Under the 401(k) Plan, eligible employees are permitted to contribute, subject to certain limitations, up to
100% of their gross salary and the Company’s matching contribution is 50% of the first 6% of the eligible employees’
contributions. In the years ended December 31, 2021, 2020 and 2019, the Company’s contributions to the 401(k) Plan
totaled $0.5 million, $0.4 million, and $0.8 million, respectively.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has

evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under
the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of the end of the period covered by this
Annual Report on Form 10-K. Based on such evaluation, our principal executive officer and principal financial officer
have concluded that, as of the end of such period, our disclosure controls and procedures were adequate and effective.

Internal Control Over Financial Reporting

(a)

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial

reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act
as a process designed by, or under the supervision of, our principal executive and principal financial officers and
effected by our board of directors, management, and other personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles in the U.S. and includes those policies and procedures that:

•

pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions
and dispositions of our assets;

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that our receipts and
expenditures are being made only in accordance with authorizations of our management and directors; and

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31,

2021. In making this assessment, management used the criteria established in Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in 2013.

Based on this assessment, management has concluded that, as of December 31, 2021 our internal control over

financial reporting is effective.

Ernst & Young LLP, our independent registered public accounting firm, has issued a report on the effectiveness

of our internal control over financial reporting as of December 31, 2021. This report appears immediately below.

(b)

Attestation Report of the Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of ImmunoGen, Inc.

Opinion on Internal Control over Financial Reporting

We have audited ImmunoGen, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, ImmunoGen, Inc. (the Company)
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on
the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related
consolidated statements of operations and comprehensive loss, shareholders’ equity (deficit) and cash flows for each of
the three years in the period ended December 31, 2021, and the related notes and our report dated February 28, 2022
expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s
Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that
our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

/s/ Ernst & Young LLP

Boston, Massachusetts
February 28, 2022

(c)

Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in

Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2021 that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that
our disclosure controls and procedures or its internal control over financial reporting will prevent all error and all fraud.
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that
the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and
instances of fraud, if any, within an organization have been detected. These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in
achieving our stated goals under all potential future conditions. Over time, controls may become inadequate because of
changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the
inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be
detected.

Item 9B. Other Information

None

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable

PART III

The information called for by Part III of Form 10-K (Item 10—Directors, Executive Officers and Corporate

Governance of the Registrant, Item 11—Executive Compensation, Item 12—Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters, Item 13—Certain Relationships and Related Transactions,
and Director Independence, and Item 14—Principal Accounting Fees and Services) is incorporated by reference from
our proxy statement related to our 2022 annual meeting of shareholders, which will be filed with the Securities and
Exchange Commission not later than May 2, 2022 (120 days after the end of the year covered by this report), except that
information required by Item 10 concerning our executive officers appears in Part I, Item 1 of this report.

Item 15. Exhibits, Financial Statement Schedules

(a)

Documents filed as part of this Report:

PART IV

(1)

(2)

See the financial statements of ImmunoGen, Inc. at Item 8 of this report.

Financial Statement Schedules:

information appears in the accompanying Consolidated Financial Statements or Notes thereto.

Schedules not included herein are omitted because they are not applicable, or the required

(3)

Exhibit Index

Incorporated by Reference
Filing Date
with SEC

August 5, 2020
January 30, 2013
August 4, 2017
August 5, 2020
June 20, 2016

Exhibit
Number
3.1
3.1
3.1
3.1(c)
3.1

Form
10-Q
10-Q
10-Q
10-Q
8-K

S-1

10-K
8-K

8-K

10-Q

November 15, 1989
(File No. 33-31219)

4.2

March 1, 2021 4.3
4.1

August 12, 2021

December 3, 2021

4.1

November 7, 2007

10.2

February 5, 2014

10.1

10-Q

May 2, 2014

10.1

10-Q

February 4, 2016

10.1

May 9, 2018

10.2

May 9, 2018

10.3

10-Q/A

August 19, 2015

10.2

10-Q

May 6, 2013

10.1

10-Q

10-K

February 8, 2011

10.1

August 4, 2017

10.1

March 1, 2021

10.6

10-K

March 1, 2019

10.13

Exhibit
Number
3.1
3.1(a)
3.1(b)
3.1(c)
3.2
4.1

4.2

4.3
4.4

4.5

10.1

10.1(a)

10.1(b)

10.1(c)

10.1(d)

10.2*

10.3*

10.3(a)*

10.4*

10.5*

10.6**

10.7*

10.8

10.9

Exhibit Description

Restated Articles of Organization, as amended
Articles of Amendment
Articles of Amendment
Articles of Amendment
Amended and Restated By-Laws

Article 4 of Restated Articles of Organization, as
amended (see Exhibit 3.1)
Form of Common Stock certificate

Description of Securities

Form of Pre-Funded Warrant issued August 12,
2021
Form of Pre-Funded Warrant issued December 6,
2021
Lease Agreement, dated as of July 27, 2007, by and
between Intercontinental Fund III 830 Winter
Street LLC, landlord, and the Registrant
First Amendment to Lease Agreement dated as of
December 9, 2013, by and between Intercontinental
Fund III 830 Winter Street LLC, landlord, and the
Registrant
Second Amendment to Lease Agreement dated as
of April 28, 2014, by and between Intercontinental
Fund III 830 Winter Street LLC, landlord, and the
Registrant
Third Amendment to Lease Agreement dated as of
December 14, 2015 by and between CRP/King 830
Winter, L.L.C., landlord, and the Registrant
Fourth Amendment to Lease Agreement dated as of
April 6, 2018 by and between CRP/King 830
Winter, L.L.C., landlord, and the Registrant
Development and License Agreement dated as of
October 20, 2008 by and between the Registrant
and Bayer HealthCare AG
Multi-Target Agreement dated as of October 8,
2010 by and between the Registrant and Novartis
Institutes for BioMedical Research, Inc.
First Amendment, effective as of March 29, 2013,
to Multi-Target Agreement by and between the
Registrant and Novartis Institutes for BioMedical
Research, Inc.
Clinical Supply Agreement effective as of
December 12, 2010 by and between the Registrant
and Società Italiana Corticosteroidi S.r.l. (Sicor)
Exclusive License and Asset Purchase Agreement
dated as of May 23, 2017 by and between the
Registrant and Debiopharm International, S.A.
Collaboration and License Agreement effective as
of October 19, 2020 by and between the registrant
and Hangzhou Zhongmei Huadong Pharmaceutical
Co., Ltd., a subsidiary of Huadong Medicine Co.,
Ltd.
Royalty Purchase Agreement dated as of January 8,
2019 among the Registrant, Hurricane, LLC,
Immunity Royalty Holdings, L.P., and OMERS IP
Healthcare Holdings Limited
First Amendment to Agreements dated as of
December 9, 2013 by and between the Registrant
and Eli Lilly and Company
Development and License Agreement with Biogen
Idec., Inc. dated October 1, 2006

Filed
with this
Form 10-K

Exhibit
Number
10.10†

10.10(a)†

10.10(b)†

10.10(c)†

Exhibit Description

2006 Employee, Director and Consultant Equity
Incentive Plan, as amended and restated through
November 11, 2014
Form of Incentive Stock Option Agreement for
Executives
Form of Non-Qualified Stock Option Agreement
for Executives
Form of Non-Qualified Stock Option Agreement
for Directors

10.10(d)† Form of Director Deferred Stock Unit Agreement
10.10(e)†

10.10(f)†

10.10(g)†

10.10(h)†

10.10(i)†

10.10(j)†

10.11†

Form of Incentive Stock Option Agreement for all
employees (including executives)
Form of Non-Qualified Stock Option Agreement
for all employees (including executives)
Form of Non-Qualified Stock Option Agreement
for Directors
Form of Restricted Stock Agreement for all
employees (including executives)
Form of Incentive Stock Option for all employees
(including executives)
Form of Non-Qualified Stock Option Agreement
for all employees (including executives)
2016 Employee, Director and Consultant Equity
Incentive Plan, as amended and restated through
June 13, 2017

10.11(a)† Form of Incentive Stock Option Agreement
10.11(b)†

Form of Non-Qualified Stock Option Agreement
for employees
Form of Non-Qualified Stock Option Agreement
for Non-Employee Directors
Form of Deferred Stock Unit Agreement for Non-
Employee Directors

10.11(c)†

10.11(d)†

10.11(e)† Form of Restricted Stock Agreement for employees
10.11(f)†

Form of Performance-Based Restricted Stock
Agreement dated February 21, 2017 and June 14,
2017
2018 Employee, Director and Consultant Equity
Incentive Plan

10.12†

10.12(a)† Form of Incentive Stock Option Agreement
10.12(b)†

Form of Non-Qualified Stock Option Agreement
for employees

10.12(c)† Form of Restricted Stock Unit Agreement
10.12(d)†

10.12(e)†

10.12(f)†

10.13†

10.14†

10.15†

10.16†

10.17†

Form of Non-Qualified Stock Option Agreement
for Non-Employee Directors
Form of Deferred Stock Unit Agreement for Non-
Employee Directors
Form of Performance-Based Stock Option
Agreement dated February 7, 2020
Amended and Restated 2018 Employee Director
and Consultant Equity Incentive Plan
Employee Stock Purchase Plan, as amended
through September 27, 2019
2004 Non-Employee Director Compensation and
Deferred Stock Unit Plan, as amended on
September 16, 2009
Form of Proprietary Information, Inventions and
Competition Agreement between the Registrant and
each of its executive officers
Change in Control Severance Agreement dated as
of March 31, 2017 between the Registrant and
Anna Berkenblit

Incorporated by Reference
Filing Date
with SEC

Form
8-K

November 13, 2014

Exhibit
Number
10.1

S-8

10-Q

10-Q
10-K

10-K

S-8

8-K

8-K
8-K

8-K

10-Q
10-Q

8-K

8-K
8-K

8-K

10-K

8-K

10-Q

November 15, 2006

99.4

November 15, 2006

99.5

October 29, 2010

10.1

October 29, 2010
August 29, 2012

10.1
10.14(g)

August 29, 2012

10.14(h)

August 29, 2012

10.14(i)

November 21, 2012

99.1

April 26, 2016

10.1

April 26, 2016

10.2

June 16, 2017

10.1

December 13, 2016
December 13, 2016

10.2
10.3

December 13, 2016

10.4

December 13, 2016

10.5

August 4, 2017
August 4, 2017

10.3
10.4

June 22, 2018

10.1

June 22, 2018
June 22, 2018

10.2
10.3

10.4
10.5

June 22, 2018

10.6

March 11, 2020

10.11(f)

June 17, 2021

10.1

November 5, 2019

10.1

November 4, 2009

10.1

February 8, 2007

10.15

May 5, 2017

10.3

Incorporated by Reference
Filing Date
with SEC

Exhibit
Number
10.4

May 5, 2017

Form
10-Q

10-Q

10-K

10-Q

8-K
10-Q
8-K
8-K
10-Q

May 5, 2017

10.7

May 5, 2015

10.9

August 5, 2020

10.4

March 1, 2021

10.19

August 7, 2019

February 20, 2018
May 10, 2021
December 20, 2019
December 20, 2019
August 5, 2020

10.1

10.1
10.1
10.2
10.3
10.2

8-K

December 18, 2020

10.1

Exhibit
Number
10.18†

10.19†

10.20†

10.21†

10.22†

10.23†

10.24†

10.25†

Exhibit Description
Change in Control Severance Agreement dated as
of March 31, 2017 between the Registrant and
Mark J. Enyedy
Change in Control Severance Agreement dated as
of March 31, 2017 between the Registrant and
Thomas Ryll
Change in Control Severance Agreement dated as
of March 31, 2017 between the Registrant and
Theresa G. Wingrove
Change in Control Severance Agreement dated as
of July 20, 2020 between the Registrant and Susan
Altschuller, Ph.D.
Change in Control Severance Agreement dated as
of June 1, 2020 between the Registrant and Stacy
Coen
Change in Control Severance Agreement dated
November 15, 2021 between the Registrant and
Kristen Harrington-Smith
Compensation Policy for Non-Employee Directors,
as amended through December 16, 2021
Severance Pay Plan for Vice Presidents and Higher,
as amended through June 20, 2019

10.27(c)†

10.28

21
23
31.1

Summary of ImmunoGen Incentive Bonus Plan
Inducement Equity Incentive Plan, as amended

10.26†
10.27†
10.27(a)† Form of Non-Qualified Stock Option Agreement
10.27(b)† Form of Restricted Stock Unit Agreement
Form of Performance-Based Stock Option
Agreement (February 2020) under the Inducement
Equity Incentive Plan
Open Market Sale AgreementSM, dated
December 18, 2020, by and between the Registrant
and Jeffries LLC
Subsidiaries of the Registrant
Consent of Ernst & Young LLP
Certifications of the principal executive officer and
principal financial officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002
Certifications of principal executive officer and
principal financial officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
Financial statements from the annual report on
Form 10-K of ImmunoGen, Inc. for the year ended
December 31, 2021 formatted in inline XBRL
(eXtensible Business Reporting Language): (i) the
Consolidated Balance Sheets; (ii) the Consolidated
Statements of Operations and Comprehensive Loss;
(iii) the Consolidated Statements of Shareholder’s
Equity (Deficit); (iv) the Consolidated Statements
of Cash Flows; and (v) the Notes to Consolidated
Financial Statements
Cover Page Interactive Data File (formatted as
Inline XBRL and contained in Exhibit 101)

104

101

Filed
with this
Form 10-K

X
X
X

* Portions of this Exhibit were omitted, as indicated by [***], and have been filed separately with the Secretary of the

Commission pursuant to the Registrant’s application requesting confidential treatment.

** Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets [***]
because the identified confidential portions (i) are not material and (ii) is the type of information the Registrant
treats as private or confidential.

† Exhibit is a management contract or compensatory plan, contract or arrangement required to be filed as an exhibit to

this report on Form 10-K.

Item 16. Form 10-K Summary

None

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has

duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

IMMUNOGEN, INC.

By:

/s/Mark J. Enyedy
Mark J. Enyedy
President and
Chief Executive Officer
(Principal Executive Officer)

Dated: February 28, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the

following persons on behalf of the Registrant in the capacities and on the dates indicated.

Signature

Title

Date

/s/ MARK J. ENYEDY
Mark J. Enyedy

President, Chief Executive Officer and Director
(Principal Executive Officer)

February 28, 2022

/s/ SUSAN ALTSCHULLER Ph.D.
Susan Altschuller Ph.D.

Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

February 28, 2022

/s/ RENEE LENTINI
Renee Lentini

/s/ STEPHEN C. MCCLUSKI
Stephen C. McCluski

/s/ STUART A. ARBUCKLE
Stuart A. Arbuckle

/s/ MARK GOLDBERG, M.D.
Mark Goldberg, M.D.

/s/ TRACEY L. MCCAIN
Tracey L. McCain

/s/ DEAN J. MITCHELL
Dean J. Mitchell

/s/ KRISTINE PETERSON
Kristine Peterson

/s/ HELEN THACKRAY, M.D.
Helen Thackray, M.D.

/s/ RICHARD J. WALLACE
Richard J. Wallace

Vice President – Finance
(Principal Accounting Officer)

February 28, 2022

Chairman of the Board of Directors

February 28, 2022

Director

IMMUNOGEN, INC.
Stock Price Performance Graph

The graph and table below compare the annual percentage change in our cumulative total shareholder return on our
common stock for the period from December 31, 2016 through December 31, 2021 (as measured by dividing (i) the sum of
(A) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (B) the difference
between our share price at the end and the beginning of the measurement period; by (ii) the share price at the beginning of the
measurement period) with the total cumulative return of the NASDAQ Stock Market (US), the NASDAQ Pharmaceutical
Index, the NASDAQ US Benchmark TR Index, and the NASDAQ Biotechnology TR Index during such period, as
applicable. We have not paid any dividends on our common stock, and no dividends are included in the representation of our
performance. The stock price performance on the graph below is not necessarily indicative of future price performance.
Information used in the graph for the NASDAQ Stock Market (US) and the NASDAQ Pharmaceutical Index was prepared by
the Center for Research in Security Prices (CRSP). The CRSP index data was not accessible after December 31, 2020 and,
accordingly, the NASDAQ US Benchmark TR Index replaced the NASDAQ Stock Market Index (US) and the NASDAQ
Biotechnology TR Index replaced the NASDAQ Pharmaceutical Stocks Total Return Index beginning in 2021. The CRSP
indices have been included with data through 2020.

400.00

350.00

300.00

250.00

200.00

150.00

100.00

50.00

0.00

12/31/2016

12/31/2017

12/31/2018

12/31/2019

12/31/2020

12/31/2021

ImmunoGen Inc.

NASDAQ Stock Market (US Companies)

NASDAQ Pharmaceutical Index

NASDAQ US Benchmark TR Index

NASDAQ Biotechnology TR Index

IMMUNOGEN, INC. .................................................................................................... $100.00
NASDAQ STOCK MARKET (US) ............................................................................. $100.00
NASDAQ PHARMACEUTICAL INDEX*................................................................. $100.00
NASDAQ US BENCHMARK TR INDEX .................................................................. $100.00
NASDAQ BIOTECHNOLOGY TR INDEX ............................................................... $100.00

$314.22
$129.30
$119.61
$121.38
$121.63

$235.28
$127.19
$113.92
$114.77
$110.85

$250.24
$173.11
$133.34
$150.55
$138.69

$316.16
$249.17
$156.33
$182.57
$175.33

$229.84
$175.37

Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020 Dec 2021
$363.71

This index represents a group of peer issuers compiled by the CRSP.

The above graph and table assume $100 invested on December 31, 2016 with all dividends reinvested, in each of our

common stock, the NASDAQ Stock Market (US), the NASDAQ Pharmaceutical Index, the NASDAQ US Benchmark TR
Index, and the NASDAQ Biotechnology TR Index. Upon written request by any shareholder, we will promptly provide a list
of the companies comprising the NASDAQ Pharmaceutical Index.

(This page has been left blank intentionally.)

CORPORATE
INFORMATION
EXECUTIVES
Mark J. Enyedy
President and Chief Executive Officer

Susan Altschuller, PhD
Senior Vice President, Chief Financial Officer

Audrey Bergan
Senior Vice President, Chief Human Resources Officer

Anna Berkenblit, MD, MMsC
Senior Vice President, Chief Medical Officer

Stacy Coen
Senior Vice President, Chief Business Officer

Kristen Harrington-Smith
Senior Vice President, Chief Commercial Officer

Robert Herbst, PhD
Vice President, Technical Operations

Mimi Huizinga, MD, MPH, FACP
Senior Vice President, Head of Medical Affairs

Joseph J. Kenny, PhD, JD
Vice President, Acting General Counsel, IP,
and Secretary

Theresa G. Wingrove, PhD
Senior Vice President, Regulatory Affairs and Quality

SHAREHOLDER INQUIRIES

Information about ImmunoGen can be found at
www.immunogen.com. Inquiries related to the Company
may be directed to the Investor Relations department at
our headquarters. Communications related to stock and
transfer requirements, including lost stock certiﬁcates and
change of name or address, should be directed to the
Transfer Agent.

ImmunoGen, Inc.
830 Winter Street | Waltham, MA 02451
781–895–0600 | www.immunogen.com

DIR EC TORS

Stephen C. McCluski

Chairman of the Board, Former Senior Vice President and
Chief Financial Officer, Bausch & Lomb, Inc.

Stuart A. Arbuckle
Executive Vice President and Chief Operating Officer, Vertex
Pharmaceuticals, Inc.

Mark J. Enyedy
President and Chief Executive Officer, ImmunoGen, Inc.

Mark Goldberg, MD
Former Executive Vice President, Medical and Regulatory
Strategy, Synageva BioPharma Corp.

Tracey L. McCain, Esq
Executive Vice President and Chief Legal and Compliance
Officer, Blueprint Medicines Corporation

Dean J. Mitchell
Former Executive Chairman of the Board,
Covis Pharma Holdings S.a.r.l.

Kristine Peterson
Former Chief Executive Officer, Valeritas, Inc.

Helen Thackray, MD
Chief Research and Development Officer,
BioCryst Pharmaceuticals, Inc.

Richard J. Wallace
Former Senior Vice President Research and Development,
GlaxoSmithKline plc

AUDITORS

LEGAL COUNSEL

Ernst & Young LLP
Boston, MA

Ropes & Gray, LLP
Boston, MA

V I RT UA L A N N UA L M E E T I N G

S TO C K T R A N S F E R AG E N T A N D R EG I S T R A R

9:00 AM ET on June 15, 2022

www.virtualshareholdermeeting.com/

IMGN2022

No in-person meeting will be held.

Broadridge Corporate Issuer Solutions, Inc.
P.O. Box 1342
Brentwood, NY 11717
Phone: 855–697–4961
Fax: 215–553–5402
Email: shareholder@broadridge.com

We extend our sincere gratitude to the patients,
families, and medical professionals who participate
in our clinical trials as we work to meaningfully
improve the lives of people with cancer.

830 Winter Street
Waltham, MA 02451
781–895–0600
www.immunogen.com

NASDAQ: IMGN