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Cramer: Speed bump or stop sign for ImmunoGen?

(Click for video linked to a searchable transcript of this Mad Money segment)

With shares tumbling more than 10% in only a month, what should you do with Immunogen?

As a speculative biotech play, Cramer has been a fan of this stock for quite some time largely due to the way in which their drugs fight cancer.

"Immunogen is at the forefront of treatment that can search and destroy tumors without hurting the rest of the body," Cramer said.

"Basically, Immunogen's drugs use antibodies to hunt down cancer cells—like a guided missile—and then they hit the cancer with a highly-toxic payload that's anywhere from a hundred to a thousand times more potent than traditional chemotherapy," Cramer said.

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The potential appears to be wide ranging.

"Immunogen has some early stage drugs: one for lung and ovarian cancer, one for lymphoma, and one for head and neck cancer," Cramer said.

However, shares declined after UBS came out with a very negative piece of research in which they expressed concern about the toxicity of Immunogen's pipeline. The UBS price target is $8.50, significantly lower than the market price today.

Because the fortunes of small drug companies such as Immunogen rise and fall with the effectiveness of their drugs, the UBS note could be prescient.

More bad news, especially from FDA trials, could send shares tumbling. However, positive developments could do the opposite; they could send shares soaring.

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Cramer believes the latter is the more likely scenario.

The company achieved a milestone back in February when the FDA approved Kadcyl, a breast cancer drug that has the potential to be a major blockbuster. Because the drug was developed in partnership with Roche, the deal cuts into Immunogen's profits.

However, Cramer thinks what matters more for share price is that the FDA approval validates Immunogen's technology.

And the technology could revolutionize the health care industry. Looking at the risk versus the reward, Cramer thinks this stock deserves further consideration.

"Keep an eye on this one," he said. "Watch developments very closely. I think the story will remain in tact."

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