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Tuesday, H.C. Wainwright adjusted its price target for MacroGenics (NASDAQ:MGNX) shares, reducing it to $2 from the previous $4 while maintaining a Neutral rating. The stock, currently trading at $1.96, has fallen significantly, with a -86.4% return over the past year. According to InvestingPro analysis, MacroGenics appears undervalued based on its Fair Value metrics. The decision came after MacroGenics announced last week that it would halt the development of its drug candidate vobra duo. The Phase 2 TAMARACK trial data, which led to this decision, showed a median radiographic progression-free survival (rPFS) of 9.5 months for the lower dose cohort and 10.0 months for the higher dose cohort in patients with metastatic castration-resistant prostate cancer (mCRPC). With a market capitalization of $123.66 million and negative EBITDA of -$103.04 million in the last twelve months, the company faces significant financial challenges. InvestingPro subscribers can access 13 additional key insights about MacroGenics’ financial health and prospects.
The trial evaluated the efficacy of vobra duo at two different dosages in mCRPC patients who had previously undergone treatment with a novel hormonal therapy and up to one docetaxel-containing regimen. Despite the mature rPFS results from the trial, the company has chosen not to proceed with the development of this particular drug, which was disclosed with a data cut-off on February 21, 2025.
According to the H.C. Wainwright analyst, the discontinuation of vobra duo was not surprising given prior disclosures about the drug. The toxicity profile reported was consistent with previous data. In light of the recent development, the firm has removed the risk-adjusted revenues from vobra duo from its DCF-based valuation model for MacroGenics.
MacroGenics is also conducting a Phase 1 trial for another drug candidate, MGC026, which targets the same B7H3 protein as vobra duo but uses a different payload, a topoisomerase inhibitor called exatecan, compared to vobra duo’s DNA-alkylating agent, duocarmycin. The company anticipates dose expansion in selected indications for MGC026 within 2025. Preclinical data suggest that MGC026 may offer greater potency and improved safety over deruxtecan-conjugated ADCs.
The reevaluation of MacroGenics’ stock price target by H.C. Wainwright reflects the latest clinical developments and the company’s pivot in its development strategy. With the adjusted valuation, the investment firm reaffirms its neutral stance on the biotechnology company’s shares. Despite challenges, MacroGenics maintains a healthy current ratio of 3.92, indicating strong short-term liquidity. For a comprehensive analysis of MacroGenics and similar biotech companies, investors can access detailed Pro Research Reports available on InvestingPro.
In other recent news, MacroGenics has reported its fourth-quarter 2024 earnings, showcasing a narrower-than-expected loss per share and a notable increase in revenue. The company announced a Q4 2024 EPS of -0.07, surpassing analysts’ forecast of -0.40, while revenue reached $49.4 million, exceeding the anticipated $29.19 million. Total (EPA:TTEF) revenue for 2024 was $150 million, a substantial rise from $58.7 million in 2023, primarily driven by collaborative agreements. Despite the positive earnings, MacroGenics reported a net loss of $67 million for the year, attributed to increased research and development expenses.
In analyst ratings, Stifel maintained a Hold rating on MacroGenics with a price target of $6.00, focusing on upcoming clinical trial results for the drug lorigerlimab. Meanwhile, Citizens JMP reiterated a Market Outperform rating, noting the potential value boost from a possible Gilead Sciences (NASDAQ:GILD) partnership decision in 2025. MacroGenics’ financials indicate operating expenses of $260 million for the fiscal year, with a year-end cash balance of $202 million, expected to sustain operations into the second half of 2026.
The company’s strategic developments include the expansion of its Phase 2 clinical program for lorigerlimab in various tumor types, with significant trial updates anticipated in the latter half of 2025. MacroGenics has also decided to halt the internal development of vobra-duo, aligning with analysts’ expectations. The company’s efforts continue to focus on advancing its clinical pipeline and exploring potential partnerships to drive future growth.
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