On Monday, H.C. Wainwright adjusted its outlook on MacroGenics (NASDAQ:MGNX), reducing the biopharmaceutical company's price target significantly to $4 from the previous $16, while retaining a Neutral stance on the stock.
The revision follows MacroGenics' recent announcement of its first-quarter financials for 2024 and interim results from the Phase 2 TAMARACK trial.
The study is assessing the company's B7H3-targeted antibody-drug conjugate, vobra duo, in patients with metastatic castration-resistant prostate cancer (mCRPC) who have undergone treatment with novel hormonal therapy and a docetaxel-containing regimen.
According to the data presented, as of April 12, there was an increase in Grade 3 or higher treatment-emergent adverse events (TEAEs) compared to earlier data reported on January 4.
In the trial, 54% of patients receiving the 2.0mg/kg dosage every four weeks and 52% of those receiving the 2.7mg/kg dosage reported such adverse events. This is a notable increase from the 25% and 31%, respectively, reported previously. Additionally, adverse events led to a higher rate of dose interruptions and treatment discontinuations.
Most concerning were the five fatal events reported: one in the 2.0mg/kg cohort and four in the 2.7mg/kg cohort. While some deaths were considered unrelated to the study drug, the three deaths from pneumonitis and the one from pleural effusion in the higher dosage group are under investigation, as the trial is still ongoing.
Due to these safety concerns, H.C. Wainwright has reduced the estimated probability of vobra duo's approval for treating mCRPC from 30% to 10%. Similarly, the probability of approval for another of MacroGenics' drugs, lorigerlimab, has been lowered to 15% from the previous 25%.
Despite these setbacks, the firm maintains its Neutral rating but has recalibrated its 12-month price expectation to reflect the updated assessment of the drug's approval likelihood and safety profile.
InvestingPro Insights
As MacroGenics (NASDAQ:MGNX) navigates the challenges presented by the recent clinical trial results, investors are closely monitoring the company's financial health and market performance. The latest data from InvestingPro underscores the precarious situation MGNX finds itself in. The company's market capitalization stands at a modest $207.32 million, reflecting investor caution amidst the ongoing uncertainties. With a negative P/E ratio of -8.67 and an adjusted P/E ratio for the last twelve months as of Q1 2024 at -8.92, the market is signaling skepticism about the company's earnings potential in the near term.
Moreover, the stock's price volatility is evident, with the price currently trading near its 52-week low, and a significant decline over the last six months. The InvestingPro Tips highlight two critical points for investors: MGNX holds more cash than debt on its balance sheet, which could provide some stability, and the stock's RSI suggests it is in oversold territory, potentially indicating a buying opportunity for risk-tolerant investors. It's also worth noting that analysts do not anticipate the company will be profitable this year, and the stock has fared poorly over the last month, shedding light on the bearish sentiment surrounding the stock.
For those interested in a deeper analysis, there are additional InvestingPro Tips available that could provide further insights into MacroGenics' financial health and stock performance. For instance, understanding the company's cash burn rate and gross profit margins could be crucial for assessing its long-term viability. To explore these insights, investors can visit https://www.investing.com/pro/MGNX and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. The additional tips listed on InvestingPro could be instrumental in making a more informed investment decision regarding MGNX.
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