After the markets closed Friday, MacroGenics (MGNX) announced a partial clinical hold on its Phase 1 monotherapy study of MGD009, a bispecific antibody developed under its DART platform that targets B7-H3 and CD3 in several solid tumor indications. The stock dived by nearly 18% as a result.
The drug is supposed to be stalled until the first quarter of 2019. The hold was placed following reports of hepatic adverse events from the monotherapy trial, which include reversible elevations of transaminases with or without concurrent elevations of bilirubin. Patients currently enrolled in the study can continue on, but no new patients can be taken on until a review of the amendments to the program are enforced.
Regardless of the slowdown, H.C. Wainwright’s analyst Debjit Chattopadhyay has a hunch about the drug’s future and rates the stock a Buy with a price target of $34. (To watch Chattopadhyay’s track record, click here)
“The observed transaminitis, we believe is potentially related to cytokine release due to the CD3 domain. Note, during 2018, MacroGenics expanded its B7-H3 franchise that spans: (1) enoblituzumab plus antiPD-1; (2) MGD009 monotherapy; (3) MGD009 plus anti-PD-1; and (4) MGD018 (B7-H3 ADC),” Chattopadhyay said.
The analyst notes that at a recent SITC meeting, the company unveiled data, which pointed to “compelling responses” for patients without any major safety issues.
“It is entirely plausible that the transaminitis is primarily a result of the CD3 domain. MacroGenics intends to submit protocol amendments prior to YE18, and we would expect a favorable resolution to the partial clinical hold during 1Q19. Importantly, the B7-H3 franchise is not included in our current model as we await directional clarity on potential mid-stage or registration studies, which are likely to emerge during 2H19,” Chattopadhyay explains.
“[…] given the limited clarity on its other pipeline assets or indication that MacroGenics intends to move into registration studies, a miss from the SOPHIA program could translate into a 60%+ move to the downside in the stock from current levels, by our estimates,” the analyst concludes.
TipRanks checked in with four analysts who have reviewed the stock within the last three months. Out of the biotech crew, 2 are bullish, 1 sidelined and 1 bearish. The price target of $27.50, shows about a 120% upside from where the stock is currently selling. (See MGNX’s price targets and analyst ratings on TipRanks)